FTC gives go ahead for FedEx / TNT deal

The US Federal Trade Commission has given the go ahead for the deal between FedEx and TNT. The USD $4.8bn deal has yet to be formally approved by the European Union.

The takeover by FedEx, hotly contested by rivals UPS, will make it the second biggest international overnight express company trading in the EU after DHL. Though not formally approved by the EU, commissioners have indicated that they will approve it soon.

FedEx made the move to buy Dutch company TNT as it has fallen behind in competition for business across the 28 member states. UPS had made a move to buy out TNT last year but were rebuffed by EU anti trust commissioners because they would completely dominate the European overnight express market.

With the double digit growth of e-commerce in many European countries, the move is sensible and should enable must greater growth prospects for the new company. While UPS has appealed the decision on basis that it will now be the third largest company, DHL have done little to oppose it. It has been reported that DHL has taken the stance that during the process of the two companies merging there will be major issues in their day to day business activities and this will benefit DHL. It has also been reported that insiders in both TNT and FedEx recognise this issue will be a major problem to tackle from the outset of the merger taking place, costing them business.

The EU’s antitrust commissioners have said that the deal will not be anticompetitive and this has made the merger almost certain. It is expected that the EU will give formal approval early in 2016. When this happens there will only be three major players left delivering parcels around the world from the EU.