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LAXintl
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Court: EU improperly blocked UPS-TNT deal

Tue Mar 07, 2017 10:01 pm

The EU General Court agreed with United Parcel Service on Tuesday that the EU had wrongly blocked its takeover of Dutch peer TNT 4 years ago, allowing the world's largest package delivery company to sue regulators for damages.

Court annulled the EU decision on Tuesday, citing a procedural irregularity saying the EU Commission had infringed UPS's rights of defense by using a different econometric model in its analysis than that used in previous exchange of views and arguments.


UPS wins court challenge against EU block to TNT bid
http://www.reuters.com/article/us-unite ... SKBN16E17B

=


Hopefully UPS continues to pursue the case and seeks damages.
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TWA772LR
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Re: Court: EU improperly blocked UPS-TNT deal

Tue Mar 07, 2017 10:13 pm

If I was a C-level suite in Louisville, I'd be pissed. Isn't FedEx in the process of taking over TNT?
When wasn't America great?


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TheLion
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 2:54 am

There's no way this should have been allowed anyway. It's anti-competitive for one and if I'm honest big corporations are starting to become just too big. Regardless of procedure it was a sensible decision.
 
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BobPatterson
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 3:03 am

TheLion wrote:
There's no way this should have been allowed anyway. It's anti-competitive for one and if I'm honest big corporations are starting to become just too big. Regardless of procedure it was a sensible decision.


Please help me understand your position.

Why would UPS + TNT be anti-competitive while FedEx + TNT is not anti-competitive?
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
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rotating14
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 5:16 am

BobPatterson wrote:
TheLion wrote:
There's no way this should have been allowed anyway. It's anti-competitive for one and if I'm honest big corporations are starting to become just too big. Regardless of procedure it was a sensible decision.


Please help me understand your position.

Why would UPS + TNT be anti-competitive while FedEx + TNT is not anti-competitive?



UPS is a bigger company than FedEx. $92 billion market cap vs $51 billion market cap. FedEx could absorb TNT easier than UPS could without locking up markets that would make the shipping landscape uncompetitive for FedEx.
 
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Jofa
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 6:18 am

Here it is simplified: TNT big in europe FedEx small in europe, TNT small in USA FedEx big in USA. Good match.
 
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BobPatterson
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 7:12 am

Thanks for the replies. BUT......

I'm very confused. Maybe someone can untangle this for me.

On the Wikipedia page for ASL Ireland they say:

"The company announced on 5 February 2016 that it had agreed to buy TNT Airways and PAN Air, on the condition that FedEx's purchase of TNT goes ahead. The sale went through in May 2016. TNT Airways became ASL Airlines Belgium and Pan Air became ASL Airlines Spain."

Did FedEx simply turn around and sell or, by some other arrangement, turn TNT over to ASL?

I realize that Wikipedia is sometimes not totally accurate, and I don't know what to think in this case.

What are the current relationships between FedEx, ASL and TNT?
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
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Jofa
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 7:38 am

TNT Airways is/was seperate from TNT. And please somebody correct me if im wrong, but FedEx could not by law buy a european airline so thats how ASL somehow came into the picture.
 
USAirKid
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 7:55 am

BobPatterson wrote:
Thanks for the replies. BUT......

I'm very confused. Maybe someone can untangle this for me.

On the Wikipedia page for ASL Ireland they say:

"The company announced on 5 February 2016 that it had agreed to buy TNT Airways and PAN Air, on the condition that FedEx's purchase of TNT goes ahead. The sale went through in May 2016. TNT Airways became ASL Airlines Belgium and Pan Air became ASL Airlines Spain."

Did FedEx simply turn around and sell or, by some other arrangement, turn TNT over to ASL?

I realize that Wikipedia is sometimes not totally accurate, and I don't know what to think in this case.

What are the current relationships between FedEx, ASL and TNT?


I'd have to go digging, but this sounds what happened when DHL bought Airborne Express, the airline was spun out into its own company.

I'm not sure on the European ownership rules, but I'd guess they don't allow an American company (FedEx) to own European airlines, and American airlines aren't allowed to fly freight inside Europe, so TNT/FedEx had to sell the airline business to a European company, and they're contracting the lift back for their operations.
 
PanHAM
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 8:58 am

Fedex was mainly interested in TNT's ground operations. FX has a European air Network using sub-contractors but they had Little on the ground. They have that now with the TNT trucking ops. That allows them to handle everything from envelopes to big uglies. ASL is a European Company which might work for FX or not or have other customers as well.
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FX1816
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 9:03 am

USAirKid wrote:
BobPatterson wrote:
Thanks for the replies. BUT......

I'm very confused. Maybe someone can untangle this for me.

On the Wikipedia page for ASL Ireland they say:

"The company announced on 5 February 2016 that it had agreed to buy TNT Airways and PAN Air, on the condition that FedEx's purchase of TNT goes ahead. The sale went through in May 2016. TNT Airways became ASL Airlines Belgium and Pan Air became ASL Airlines Spain."

Did FedEx simply turn around and sell or, by some other arrangement, turn TNT over to ASL?

I realize that Wikipedia is sometimes not totally accurate, and I don't know what to think in this case.

What are the current relationships between FedEx, ASL and TNT?


I'd have to go digging, but this sounds what happened when DHL bought Airborne Express, the airline was spun out into its own company.

I'm not sure on the European ownership rules, but I'd guess they don't allow an American company (FedEx) to own European airlines, and American airlines aren't allowed to fly freight inside Europe, so TNT/FedEx had to sell the airline business to a European company, and they're contracting the lift back for their operations.


No ABX Air was a separate entity from Airborne Express well before the merger with DHL, almost 20 years I believe. You might be thinking of DHL and ASTAR Air Cargo. DHL Airways had to be spun off from DHL Express and thus became ASTAR before the merger with Airborne.
 
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readytotaxi
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 9:21 am

TWA772LR wrote:
If I was a C-level suite in Louisville, I'd be pissed. Isn't FedEx in the process of taking over TNT?


Appears so.
http://about.van.fedex.com/newsroom/glo ... t-express/
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BobPatterson
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 8:34 pm

readytotaxi wrote:
TWA772LR wrote:
......Isn't FedEx in the process of taking over TNT?


Appears so.
http://about.van.fedex.com/newsroom/glo ... t-express/


Thanks for posting the link to that document, and to all others who replied. It looks like FedEx set up a kind of subsidiary Dutch corporation "FedEx Acquisition B.V." to get around the problem of a U.S. corporation owning a European air company.

Also, FedEx's acquisition makes great sense to me upon learning that it was primarily TNT's ground ops that was the object of affection.
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
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Polot
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Re: Court: EU improperly blocked UPS-TNT deal

Wed Mar 08, 2017 8:48 pm

FX1816 wrote:
No ABX Air was a separate entity from Airborne Express well before the merger with DHL, almost 20 years I believe. You might be thinking of DHL and ASTAR Air Cargo. DHL Airways had to be spun off from DHL Express and thus became ASTAR before the merger with Airborne.

No, ABX Air was Airborne Express's air division which was spun off into a new company (named ABX Air) when DHL purchased Airborne's ground operations.

ASTAR was formerly DHL's US air operator (DHL Airways). While technically under US ownership FedEx and UPS were complaining that the airline was effectively foreign controlled (by DHL) so a bunch of private investors purchased the airline and rebranded it as ASTAR shortly before DHL bought Airborne.
 
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TheLion
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Re: Court: EU improperly blocked UPS-TNT deal

Thu Mar 09, 2017 3:50 am

rotating14 wrote:
BobPatterson wrote:
TheLion wrote:
There's no way this should have been allowed anyway. It's anti-competitive for one and if I'm honest big corporations are starting to become just too big. Regardless of procedure it was a sensible decision.


Please help me understand your position.

Why would UPS + TNT be anti-competitive while FedEx + TNT is not anti-competitive?


UPS is a bigger company than FedEx. $92 billion market cap vs $51 billion market cap. FedEx could absorb TNT easier than UPS could without locking up markets that would make the shipping landscape uncompetitive for FedEx.


Exactly. tbh neither deal is an appropriate one. The cargo sector is not exactly full of large scale operators to choose between, unlike the passenger side (excluding smaller amounts of pax aircraft belly cargo of course).
 
blueflyer
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Re: Court: EU improperly blocked UPS-TNT deal

Thu Mar 09, 2017 6:13 am

rotating14 wrote:
UPS is a bigger company than FedEx. $92 billion market cap vs $51 billion market cap. FedEx could absorb TNT easier than UPS could without locking up markets that would make the shipping landscape uncompetitive for FedEx.

The issue wasn't so much the overall market cap as the competitive situation in parts of Europe. FedEx's European market share, before the TNT acquisition, was less than 10% and was limited mostly to the larger business markets. In other parts, a merger between TNT and UPS would have lowered the number of competitors from three (the other being DHL) to two, with FedEx not a factor. EU competition authorities saw a potential merger between UPS and TNT as an anti-competitive move, whereas a merger between TNT and FedEx was considered more positively because it adds a global network to TNT's existing offerings and does not reduce competition much due to FedEx's small market share.

BobPatterson wrote:
Thanks for posting the link to that document, and to all others who replied. It looks like FedEx set up a kind of subsidiary Dutch corporation "FedEx Acquisition B.V." to get around the problem of a U.S. corporation owning a European air company.

Also, FedEx's acquisition makes great sense to me upon learning that it was primarily TNT's ground ops that was the object of affection.

FedEx didn't set up a subsidiary to "get around the problem." A company's ownership matters as much as its place of registration. A company owned by American shareholders, even if registered in The Netherlands, cannot control a European airline (similar restrictions exist for US airlines and foreign owners). When FedEx officially bought TNT, the airline division, TNT Airways was sold to ASL Aviation, an Irish company with European shareholders, and rebranded ASL Airlines Belgium. FedEx and ASL have entered in a long-term agreement. It isn't a unique situation. Most of UPS' intra-EU flying is done by Star Air, a Danish airline, for the same reasons.

It is true that where FedEx is the most lacking in Europe is in its road network, but it needs all of TNT to compete against UPS and DHL. FedEx doesn't have the equipment, infrastructure or people to take on TNT's volume and not bring onboard TNT's air network and infrastructure as well.
 
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LAXintl
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Re: Court: EU improperly blocked UPS-TNT deal

Fri Mar 10, 2017 7:20 pm

Per media reports, UPS will ask the court to have $267.4 million in termination fees paid to TNT and cost for the rejected deal reimbursed by EU.
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