FedEx and TNT Express have jointly announced this morning that they have obtained the unconditional approval from Brazil’s Administrative Council of Economic Defense (CADE) for FedEx's €4.4 billion offer for the Dutch company which makes the two companies a leading domestic operator in Brazil.
This follows the unconditional approval of the intended acquisition by the European Commission and the United States. China is now the only remaining major country where regulatory authority for the deal is still pending.
“We are very pleased with the unconditional approval from the Brazilian regulatory authority,” David Bronczek, President and CEO, FedEx Express, said. “Once the acquisition is closed, we look forward to the opportunities it will bring to our employees, customers and shareholders in Latin America and across the globe.”
Both companies are strongly positioned on the Brazilian market with TNT owning Mercurio and FedEx owning Rapidao Cometa.
TNT acquired Mercúrio in January 2007. Operating one of the largest road express businesses in Brazil, the company dropped into the red several years ago following the poor integration of Aracatuba, a smaller regional operator, and has focused since then on a financial turnaround, mostly through cost reductions, and better service quality.
In January 2014, TNT Express said it aimed to turn its loss-making domestic Brazilian business into a profitable market leader after deciding not to sell it off due to insufficient interest from potential buyers. TNT’s Brazilian domestic operations were put up for sale in March 2013 as part of the company’s new ‘standalone’ strategy following the failure of the UPS takeover bid.
In 2012, FedEx Express completed the acquisition of its long-time local partner Rapidão Cometa, one of Brazil’s largest transportation and logistics companies, to gain a strong domestic business in the fast-growing express market expanding dramatically in size with a much larger network. The acquisition marked an important step in its strategy for profitable growth in the Latin American and Caribbean (LAC) region, after the acquisition of Mexican domestic express firm Multipack and the launch of domestic services in Colombia in 2011.
FedEx and TNT stated today: “Under Brazilian law, the decision may be appealed within 15 calendar days of the official publication of the decision. FedEx and TNT Express continue to work constructively with the regulatory authorities to obtain clearance of the transaction in the relevant jurisdictions, including China. FedEx and TNT Express are making timely progress and continue to anticipate that the offer will close in the first half of calendar year 2016.”
