FedEx said today that it has secured financing for its €4.4 billion acquisition of TNT through a mix of cash, debt loans and credit, and will formally make its announced offer of €8 per share for the Dutch company by the end of June.
FedEx said it will be able to finance the overall €4.4 billion sum by utilising available cash on its balance sheet and through existing and new debt arrangements. It will be able to pay approximately €1.5 billion in cash from its own available resources.
In addition, FedEx has secured fully committed debt financing in the amount of €2.0 billion, subject to customary conditions, and can utilise an existing credit facility for an amount of approximately €0.9 billion.
Under the agreed transaction announced on April 7, FedEx will offer €8.00 per share in cash for all issued and outstanding ordinary shares in the capital of TNT Express, valuing TNT at €4.4 billion.
FedEx also said that it 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 USA. The offer period might need to be extended during the reviews by competition authorities.
Earlier this month, FedEx and TNT said in a joint statement that it could take up to a year to gain regulatory approval from various authorities around the world for the takeover. But they emphasised that they “remain confident that substantive anti-trust concerns, if any, can be addressed adequately and in a timely fashion”.
