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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.

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“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.

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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.

tiffany.hsu@latimes.com


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