- 27 November 2015
- Transport / Logistics Services
The Australian Competition and Consumer Commission (ACCC) has said that it will not oppose the FedEx / TNT deal.
An official statement from the ACCC, the Chairman Rod Sims said, “The ACCC sought information and views from a range of interested parties including online retailers and suppliers of express services. Customers did not raise significant competition concerns with the ACCC.”
The ACCC looked at the risks associated with cost pressures in the international delivery market and came to the conclusion that the acquisition by FedEx of the Dutch business will not have a significant impact on delivery prices. Sims said, “Based on market inquiries and information provided by the merger parties, the ACCC determined that the proposed acquisition is unlikely to result in increased prices or reduced service levels. The merged entity will continue to face significant competition, including from other international rivals with significant global delivery infrastructure and networks. The merged entity will also face a credible threat of new entry and expansion by rivals.”
The ACCC concluded that the market would not have issues with there being fewer major international overnight delivery businesses, and that should the company raise prices of delivery there is still scope for them to go to another, cheaper offer. Sims said of this, “Customers of express services face low costs to switch suppliers. If the merged entity attempted to increase prices, most customers indicated they could move to other suppliers, most notably DHL or UPS.”
The Australian commission has consulted with its opposite numbers in the EU and US as part of its investigation. The US FTC approved the deal earlier this week and the EU, which would see the greatest effect of the deal, has also given the green light to the deal. It is likely that the merger will take place in early 2016.