EC gives unconditional go ahead to FedEx / TNT deal

The European Commission (EC) has given unconditional approval to the takeover bid by FedEx of the Dutch international delivery company TNT. While this is seen as one of the biggest hurdles to get the deal there are still some countries’ antitrust commissions that have yet to give the go ahead. China’s recently created competition authority is known for going slowly over such deals and may well be the last to approve, though insiders at FedEx believe that all necessary approvals will be given in the early part of this year.

The EC has turned down an attempt by a US international delivery company to buy TNT before, finding that UPS had too big a footprint in the EU in 2013 and refusing the $7 billion takeover bid. By comparison, all other competition bodies are considered a relative formality.

Where FedEx only delivers international parcels to European clients, with TNT’s infrastructure it will now be able to trade within countries’ boundaries and thereby become the third largest international delivery company in the economic and political bloc.

Europe’s Competition Commissioner Margrethe Vestager said of the deal, “The conclusion is that European consumers will not be adversely affected by the transaction.” 

David Binks, president of FedEx’s European operations said of the news, “We are extremely pleased to receive the European Commission’s unconditional approval.”

Where there is an economic slowdown in the delivery market in the US, deliveries to customers around the world are increasing at a considerable rate led by the e-commerce industry. In buying the European company, FedEx should compensate for economic problems at home by tapping into what is a growth market where delivery companies are investing heavily in infrastructure ahead of what many see are boom times in getting parcels the final mile to customers around the world.