The European Commission has opened an in-depth investigation into the European parcels market to assess whether the proposed acquisition of TNT by FedEx is in line with EU Merger Regulation. The Commission has concerns that in a number of European markets for international express and regular small package deliveries, the combined company would not face sufficient competition from two other players, UPS and DHL. The Commission states that it could lead to higher prices for business customer and consumers.

The Commission now has 90 working days, until 7 December 2015, to investigate the impact of the proposed acquisition.

Commissioner Margrethe Vestager, in charge of competition policy, commented: “Many businesses, and in particular e-commerce, rely heavily on affordable and reliable small package delivery services, and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought. The Commission must therefore make sure that FedEx’s takeover of TNT would not impede effective competition and would not lead to higher prices for consumers.”

FedEx and TNT are two integrators of the four integrators operating in Europe. According to the European Commission, integrators are companies that control a comprehensive air and road delivery network throughout Europe and beyond. The other integrators are DHL (owned by Deutsche Post) and UPS, a US-based company. There are, in addition, a large number of smaller pan-European networks and domestic parcel delivery companies which also provide competition mainly on a domestic and pan-European basis.

Apex Insight is providing market information support to the European Commission in its assessment of the European package delivery market.

Related Report: European Parcels Market Insight Report 2015