Two European MPs have called on the European Commission to launch a deeper probe into UPS’planned €5.2 billion acquisition of TNT Express in a move that could delay the deal.
Andreas Schwab, a German Christian Democrat, and Jean-Paul Gauzès, a French Conservative, havesent a joint letter to European Commission Vice President Joaquín Almunia, who is responsible forcompetition issues, presenting their concerns about potential threats to jobs, competition andcustomers.
The Commissioner is currently examining the takeover proposal and is due to announce a decisionby July 20. UPS and TNT Express have said they expect the Commission to approve the deal without adeeper, Phase II, investigation, and plan to conclude the agreed deal in the third quarter of thisyear. UPS officially launched a €9.50 per share offer for all TNT shares on June 22 which runsuntil August 31.
In their detailed letter, the two MEPs warned that there might be substantial job cuts at thetwo companies, especially at TNT Express’ hub at Liege if Cologne/Bonn is kept as the major hub ofthe newly-merged company.
They also said that “critical market share thresholds” might be exceeded depending on thedefinition of relevant markets (global, European, national) to be considered. The MEPs wrote thatFedEx and UPS operate “some sort of duopoly” in the US express market and had “foreclosed themarket to European competitors over the past 10 years”, while the EU had opened up its markets toUS companies. “The merger would leave only one major European express and logistics company tocompete in the EU and globally,” they commented.
Schwab and Gauzès also warned that the acquisition might impact price competition in the expressmarket where TNT “has been the most aggressive price competitor” by eliminating “a low-pricecompetitor in the European express market”.
They concluded that the Commission should conduct a thorough, in-depth Phase II investigationinto the impact of the transaction on competition, the market, customers and jobs.
Schwab is a member of the European Parliament’s committee on the Internal Market and ConsumerProtection while Gauzès sits on the Economic and Monetary Affairs committee.
