According to a newspaper report published by The Financial Times last weekend without citing anysources, FedEx is in preliminary talks to acquire TNT, its smaller Dutch rival. The reported deal
follows the economic downturn and rising fuel costs that have hit the demand for package deliveriesand led to a revival of merger discussions.The Financial Times reported on Saturday that FedEx wanted to add to its European parceldelivery service. FedEx and arch-rival United Parcel Service have coveted TNT’s European parcelbusiness for a long time while they have been reluctant to take on the Dutch company’sslower-growing postal division, the newspaper further reported.
The Financial Times did not name a price that FedEx would be willing to pay for TNT, whichhas a stock market value of around $11.7 billion or €7.4 billion.
TNT and FedEx both declined to comment on the report. “As a matter of policy we do notcomment on market rumours,” TNT spokesman Pieter Schaffels told the news agency Reuters. In linewith the TNT comment, the FedEx spokesman Jim McCluskey said: “We do not discuss corporateactivities such as that.”
Following The Financial Times report, TNT shares jumped more than 25% at €23.26 after theopening of the stock exchange trading on Monday morning.
In view of its first quarterly loss in 11 years announced in June which is due to theweakening US economy and rising fuel costs among others, FedEx is seeking to build out itsContinental network as well as aiming to establish a presence in individual European countries.
Dutch TNT has a strong European presence in addition to its international air network.
The FedEx group mainly operates in the US, but in recent years has begun to expand itsinternational operations. The company bought ANC Holdings Limited at the end of 2006 to strengthenits domestic express-delivery business in the UK.
Economists have cut their US growth forecasts for later this year and next as job losses,food and fuel prices and tougher lending rules hurt consumers, The Financial Times added.
