UPS has reportedly offered to sell TNT Express businesses in more than 10 countries to overcomethe European Commission’s objections to its €5.16 billion acquisition of the Dutch company but EU
Competition Commissioner Joaquín Almunia today questioned whether these concessions would besufficient.Neither UPS nor TNT is commenting on the details of their confidential discussions with theEuropean Commission and have so far only confirmed that access to the combined UPS-TNT air networkalong with the sale of business activities and assets have been submitted as remedies to satisfythe EC’s concerns about the impact on competition from the planned merger.
News agencies Bloomberg and Reuters both cited informed sources as saying that UPS had made thedisposal offer last week and this was now being “market-tested” by seeking comments fromcompetitors about whether the remedies would be sufficient to resolve competition problems.
According to Bloomberg, UPS proposed concessions in 13 of the 27 EU member states, includingpredominantly selling TNT businesses in “smaller European markets”. Reuters said UPS had offered tosell warehouses and customer bases in more than 10 countries, mainly in Eastern Europe, and was intalks with potential buyers, including DPD and GLS.
Meanwhile, EU Competition Commissioner Joaquín Almunia today told an audience of Europeans andAmericans at the annual AmCham EU Competition Policy Conference in Brussels: “At the moment, we areclosely looking into the planned acquisition of TNT Express by UPS. We will analyse in the comingweeks the results of the market test of the remedies proposed, that will soon conclude. It stillremains to be seen whether appropriate solutions will ultimately address our concerns forexpress-parcel deliveries in Europe.”
The European Commission currently expects to make a formal decision on the UPS-TNT merger byFebruary 5, 2013. If it backs the proposed remedies, then the asset sales could be made over thefollowing six months, according to reports.
