DHL Express CEO Ken Allen today ruled out buying any businesses that UPS or TNT Express might beforced to sell by the European Commission as a condition for approving UPS’ €5.2 billion takeover
of TNT, and also said the company has no plans for any major acquisitions.Allen told German business newspaper Handelsblatt in an interview that DHL Express was not apotential buyer of any TNT or UPS businesses. “This is not a question for us at present,” hecommented.
He also ruled out any major acquisitions in response to the UPS-TNT merger, which will see theUS company overtake DHL Express as European market leader. “I would rather swallow razor bladesthan buy any sizeable rivals,” he commented. DHL Express would concentrate on organic growth,he stressed.
Analysts have speculated that the European Commission might require UPS or TNT to sell parts oftheir businesses in major European markets over combined market share concerns as a condition forapproving the deal. It has already been confirmed that the ownership of Liege-based TNT Airwayswill need to change before the takeover is completed in order to meet EU airline ownershiprules.
UPS CEO Scott Davis has said, however, that he is confident of gaining rapid approval for thetransaction. UPS expects to make a formal offer for TNT in the second quarter and complete thetransaction in the third quarter of this year, before embarking on a four-year integrationperiod.
Allen also told the German newspaper that the UPS acquisition of TNT could have a positiveeffect by leading to higher prices once the European market had consolidated around three majorplayers (UPS, DHL and FedEx). “It wouldn’t be the first market where prices rise after the numberof players has fallen,” he remarked in a reference to the US domestic express market which is nowdivided between UPS and FedEx following DHL’s exit in 2009.
A DHL Express spokesman confirmed to CEP-Research that Allen had been accurately quoted by thenewspaper.
Meanwhile, US cargo airline Southern Air announced that it has taken delivery of its third B777freighter and will add a fourth on April 25. The two cargo planes will operate round-the-worldflights for DHL Express, flying eastbound from Hong Kong to Los Angeles, Leipzig and on to HongKong.
Southern Air’s first two B777Fs have flown the Cincinnati-Bahrain-Hong Kong routes for DHL sinceSeptember 2011. All four B777Fs are painted in combined DHL and Southern Air livery.
