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By Catholic Online (NEWS CONSORTIUM)

3/19/2012 (4 years ago)

Catholic Online (www.catholic.org)

Acquisition will make UPS largest shipper in Europe

United Parcel Service or UPS has reached a deal which would allow it to buy Dutch logistics company TNT Express for around 5.2 billion euro, or $6.8 billion. UPS will pay 9.5 euros, or $12.5 per share for TNT stock, a 53.7 percent premium, the company said in a statement.

TNT, headquartered in Hoofddorp, Netherlands, is the second-biggest express mail company in Europe behind DHL, which is owned by Germany's Deutsche Post.

TNT, headquartered in Hoofddorp, Netherlands, is the second-biggest express mail company in Europe behind DHL, which is owned by Germany's Deutsche Post.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

3/19/2012 (4 years ago)

Published in Business & Economics

Keywords: UPS, TNT, Netherlands, carrier services


LOS ANGELES, CA (Catholic Online) - The acquisition of TNT Express will make UPS the largest package shipper in Europe. The acquisition will also give it a boost toward expansion in Asia and Latin America.

TNT, headquartered in Hoofddorp, Netherlands, is the second-biggest express mail company in Europe behind DHL, which is owned by Germany's Deutsche Post. The combination will have 475,000 employees worldwide and increase UPS's international sales to around 36 percent of its total from 26 percent at present.

"Why is TNT very attractive?" said UPS Chief Financial Officer Kurt Kuehn at a press conference in Amsterdam. Because it has "operations in areas where we're underserved. Brazil. Australia. The Middle East. The road and train network in Europe."

He said UPS hopes to further boost its international sales to 50 percent in the next five years.

UPS expects the two firms will earn $65 billion together with 525 to $725 million in pre-tax synergies. UPS will now derive 36 percent of its revenue abroad, up from 26 percent.

"With this combination, both UPS and TNT Express will significantly enhance their ability to serve our combined customers' complex global logistics needs," UPS CEO Scott Davis said. "The additional capabilities and broadened global footprint will support the growth and globalization of our customers' businesses. At the same time, this positions us for future growth, which will benefit our employees and shareowners."

UPS along with its chief rival FedEx were rumored to be interested in acquiring TNT. Analysts presumed the uncertain European macroeconomic situation may delay the deal, or lead to its demise. UPS is the world's largest shipper, followed by FedEx and Deutsche Post.

TNT Express was spun off from TNT NV last May. NV became PostNL NV, a mail company, and plans to sell its 29.9 percent ownership in TNT to UPS.

UPS shares rose 2.3 percent to $80.22 after it announced the acquisition. TNT shares closed at 9.35 euros after a long rally.

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