UPS to buy TNT Express
United Parcel Service Inc. plans to buy Dutch delivery company TNT Express in a $6.8-billion deal, enabling it to edge closer to its top rival in Europe, Deutsche Post DHL.
TNT, based in the town of Hoofddorp, agreed to be bought by UPS for $12.55 a share after rejecting an earlier bid of $11.88 a share. That’s a 54% premium on TNT’s $8.16 closing price Feb. 16, the last trading day before acquisition talks were announced.
Shares of UPS rose $2.70 to $81.11 on Monday, while TNT gained 34 cents to $12.42.
If the deal goes through, UPS will be able to tap TNT’s extensive road freight network through the continent.
“The additional capabilities and broadened global footprint will support the growth and globalization of our customers’ businesses,” said UPS Chief Executive Scott Davis in a statement.
With the addition of TNT’s business, UPS is expected to pull in $60 billion in annual revenue, with about 36% of sales generated outside the U.S.
The Atlanta company said Jan. 31 that its revenue for 2011 rose 7.2% to $53.1 billion, with just over a quarter of the amount coming from abroad. UPS currently serves 220 countries and territories.
The arrangement with TNT would enable UPS to nearly match DHL, the current leader in Europe.
DHL claimed 17.6% of the parcel delivery market on the continent in 2010, according to research group Transport Intelligence. TNT had 9.6%, while UPS had 7.7%, for a total of 17.3%.
The companies said in a joint note that they expected regulatory approval for the deal by the end of the third quarter.
