FedEx/TNT — all over but the shouting

No, FedEx did not complete the takeover of TNT today, and no, it won’t happen tomorrow, but the European Commission today granted unconditional approval of the deal, and completion is now a foregone conclusion.

Margrethe Vestager, the European Union’s Commissioner for Competition, said the EC had “thoroughly assessed the markets affected,” and concluded “that European consumers will not be adversely affected by the transaction.”

Approvals from several other countries are still to come. Particularly important are China and Brazil, but FedEx has said it remains confident that it will be able to complete the acquisition in the first half of 2016.

Assuming the deal does go through, FedEx will gain access to TNT’s extensive European road network, but to conform to EU law, will have to sell TNT’s two wholly-owned airlines – TNT Airways and Pan Air.  It will also face the headache of the physical integration of TNT’s Liege-based air operations (under new ownership) with its own European air network, based in Paris (CDG) and Cologne.

FedEx has said the Liege hub will be maintained as “a significant operation of the group going forward.” But what does “a significant operation” mean? It makes little sense to maintain three air hubs, all within a few hundred kilometers of one another, but it is also hard to see FedEx closing down operations at either Paris or Cologne.

We shall see.