Cargo Facts
SUBSCRIBE
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Tuesday, January 26, 2021
Log In
No Result
View All Result
  • Aircraft Leasing
  • Capacity & Demand
  • Carriers
  • E-Commerce
  • Engines
  • Express
  • Freighter Aircraft
  • Freighter Conversions
Cargo Facts
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Log In
No Result
View All Result
Cargo Facts
No Result
View All Result

European Commission torpedoes UPS acquisition of TNT Express

David Harris by David Harris
January 14, 2013
in News Archives
Share on FacebookShare on TwitterShare on LinkedIn

In a decision that seems ill-informed and which may ultimately prove to be counter-productive, the European Commission notified UPS that “it is working on a decision to prohibit the proposed acquisition of TNT Express.” The decision itself does not come as a surprise. The EC’s Competition Commissioner Joaquin Almunia has made it clear almost from Day One that he was against the €5.2 billion acquisition, and every time UPS and TNT made concessions to meet his demands, he simply added more demands.

UPS first announced its plans to acquire TNT last March.

Of course, this anti-trust investigation by the European Commission was not a simple matter. The European Commission has every right – in fact, has a duty – to ensure that EU citizens are not subjected to monopolistic business practices. When an acquisition of this magnitude is proposed, the Commission is bound to scrutinize it. Likewise, other players in the business sector in question owe it to their shareholders to actively oppose (or support, as the case may be) such a deal. In this case, it has been quite reasonable for DHL and FedEx to raise objections. UPS would probably have done the same if the roles were reversed. But the Commission’s approach seems almost to have been one of “decision first, hear the evidence later.”

But, process aside, what of the outcome? While the EC’s prohibition of the acquisition is aimed at keeping the level of competition high, it may ultimately have the opposite effect. TNT has not done well of late. It is losing money on its Asia Road Network, and on its operations in Latin America. Its air network is struggling, and, having lost two CEOs in the last two years, it lacks strong leadership. So, while the decision to block the UPS takeover may keep the number of major players in the European express business greater by one in the short term, it is not clear that TNT will survive on its own. How does that improve the lot of the EU citizen or company that wants to ship a package?

Early response to the decision in the financial markets has been savage, with TNT’s stock down almost 50% since the news broke this morning, and some analysts have been outspoken in their criticism of the EC. For example, Joel Ray, head of consultancy at UK-based Transport Intelligence, was quoted as saying: “The EU seems to have no understanding of how the sector operates and how complex it is. It clearly doesn’t understand, and sees problems that don’t exist.”

At the root of the issue is the fact that TNT Express was created almost entirely for the purpose of being taken over. It was spun out from Netherlands-based mail and express company TNT NV as a separate market entity because shareholders felt that a takeover was the best way forward. But now that the EC has closed the door on that possibility, the future of TNT Express is unclear. Will it try to compete worldwide with DHL, FedEx and TNT? Or withdraw inside Fortress Europe as a ground transport specialist? One factor is sure: whatever TNT’s plans, they will not involve another express company – at least for now.

Previous Post

Saudia MD-11F at LGB

Next Post

Time-critical cargo charter helps keep airline flying

Related Posts

Will 747s resurface in widebody conversion space led by 767s?
Freighter Conversions

Could 747s resurface in widebody conversion space led by 767s?

January 20, 2021
Pivot to cargo insulates Taiwan's combination carriers
Capacity & Demand

Pivot to cargo insulates Taiwan’s combination carriers

January 19, 2021
Decline in options curbs 2020 freighter orders
Freighter Aircraft

Decline in options curbs 2020 freighter orders

January 13, 2021
Next Post

Time-critical cargo charter helps keep airline flying

Comments 1

  1. alanbhedge says:
    8 years ago

    Maybe not another express company, but the Commission might have had in mind other more-preferred suitors…

    Any thoughts from other members of CF.net, especially those on the ground in Europe?

Leave a Reply Cancel reply

Your email address will not be published.

Get Latest Issue

CARGO FACTS CONSULTING

Maltese startup looks to 737-400Fs for launch

CFC’s Horst on choosing a jet freighter

January 26, 2021
DHL vaccines

COVID-19 vaccine traffic to be ‘blip on the radar’

December 18, 2020
  • About Us
  • Help Center
  • Privacy Terms
  • ADA Compliance
  • Advertise

Follow Us

twitter twitter linkedin podcast

© 2021 Royal Media & Cargo Facts

No Result
View All Result
  • News
    • All News
    • Aircraft Leasing
    • Capacity & Demand
    • Carriers
    • E-Commerce
    • Engines
    • Express
    • Freighter Aircraft
    • Freighter Conversions
  • Data
  • Multimedia
  • Magazine
    • Issues Archive
    • Weekly Update
  • Events
  • Consulting
  • Subscribe
  • Log In / Account

© 2021 Royal Media & Cargo Facts

Go to mobile version