FedEx’s planned €4.4 billion acquisition of TNT could take up to a year to gain regulatory approval from various authorities around the world, the two companies said on Friday (May 1).
In a joint update required by Dutch law, FedEx and TNT Express confirmed that “the companies are making timely progress on the preparations for the offer”. Under the all-cash agreed takeover announced on April 7, FedEx will offer €8 per share for all TNT shares.
FedEx expects to submit a request for review and approval of its Offer Document with the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten, AFM) in any event before June 30, 2015, which is the date by which under Dutch law a request for approval must be submitted to the AFM. This offer is then due to be voted on by TNT shareholders in the second half of the year.
However, the offer will be conditional upon FedEx obtaining the required competition clearances in the European Union, China, Brazil and, to the extent applicable, the United States of America.
FedEx and TNT Express confirmed that “the process to obtain the required regulatory merger control approvals for the Offer is proceeding without delays”. They added that they “remain confident that substantive anti-trust concerns, if any, can be addressed adequately and in a timely fashion”. One of the main issues in Europe is expected to be the requirement to sell off Liege-based TNT Airways which, as an EU-based airline, cannot be owned by a non-EU company.
FedEx and TNT Express said they aim to obtain the required regulatory clearances as soon as possible but “it is noted that completing the formal clearance procedures could take up to one year. As such, it may be required to obtain an exemption from the AFM to (further) extend the offer period”.
This would mirror developments during UPS’ failed takeover bid for TNT three years ago when the original offer was extended several times due to the EU taking much longer than expected to review the planned transaction. However, analysts have already pointed out that the overlap between FedEx and TNT in Europe is far less than was the case between UPS and TNT.
