UPS has denied Dutch media reports that some TNT Express activities in the Benelux and Germanymight be sold off as part of its €5.16 billion takeover of the Dutch express operator in response
to European Commission competition concerns.Dutch newspaper De Volkskrant reported at the weekend that UPS was considering disposing of TNT’s German and Benelux express services to overcome possible EU objections to its takeover of theDutch company. The disposals would avoid UPS gaining dominant market positions in the Netherlands,Belgium and Germany, it wrote. The newspaper cited Dutch union leader Egon Groen, head of FNVBondgenoten, as claiming that this could cost “thousands of jobs” in the three countries.
Germany, the Netherlands and Belgium are three of TNT Express’ largest markets, CEP-Researchinformation shows. According to the company’s 2011 annual report, Germany, with 4,300 employees,generated net sales of €776 million last year, which was nearly 11% of TNT’s overall sales of€7,156 million. The Netherlands, with 2,500 staff, had revenues of €462 million, while Belgium hadrevenues of €190 million. Together, the three countries thus account for net sales of more than€1.4 billion, which is about 20% of TNT’s total turnover.
But UPS denied the Dutch media report. Spokesman Norman Black told CEP-Research: “There willlikely continue to be rumours and speculation about the pending UPS-TNT Express merger, includingrecent false reports regarding the possible divestment of TNT Benelux or Germany. Such commitmentshave not been asked by the European Commission, nor were they offered by UPS or TNT.”
He said that UPS and TNT are in the process of preparing the formal notification of their mergerand the Commission is expected to issue a decision in the third quarter of this year, as previouslystated.
“This merger is focused on opportunities for growth for the employees, customers, andstakeholders of both companies. As the approval process continues, UPS and TNT will provide factualinformation regarding the transaction,” Black added.
UPS announced its €9 per share offer for TNT Express, which it will largely finance with cashreserves, in March. In mid-May, UPS said that the Offer Memorandum is expected to be published andits Offer commence in the second quarter (ending June 30). The US company expects the transactionto be cleared by the European Commission in a short Phase 1 review and the transaction to becompleted in the third quarter.
The major disposal so far confirmed is the planned change of ownership for Liege-based TNTAirways. Under EU rules, this must remain a European-owned airline in order to retain itsinternational traffic rights.
