TNT Express has provided an update on its planned $4.8bn takeover by
FedEx, stating that the two companies are making timely progress on
preparations for the offer but reiterated that it could take a year to
gain regulatory clearance.
TNT said that FedEx expects to submit a request for review and
approval of its offer document with Dutch financial service regulator
Netherlands Authority for the Financial Markets
(AFM) before June 30, which is the date by which under Dutch law a request for approval must be submitted to the AFM.
Other approvals will also need to be gained, with the offer
conditional on FedEx obtaining the required competition clearances in
the European Union, China, Brazil and, to the extent applicable, the US.
“FedEx and TNT Express remain confident that substantive anti-trust
concerns, if any, can be addressed adequately and in a timely fashion,”
the companies said in a statement.
“Although FedEx and TNT Express aim to obtain the required regulatory
clearances as soon as possible, it is noted that completing the formal
clearance procedures could take up to one year. As such, it may be
required to obtain an exemption from the AFM to (further) extend the
offer period.
“FedEx and TNT Express confirm that the companies are making timely progress on the preparations for the offer,” they said.
The two companies are confident they will receive regulatory
approval, with FedEx chief executive David Bronczek arguing that the
takeover would increase competition in Europe by creating a third strong
competitor, which would benefit customers over the long term.
Under the planned deal, the relatively small TNT air fleet of 54
freighter aircraft would also be sold to a third party, to assuage the
competition authorities in the European Union and elsewhere. This had
been one of the major sticking points in the previous proposed UPS
takeover.
TNT's owned and leased fleet includes B777Fs, B747Fs, and a combination of BAe 146, Boeing B737Fs and B757Fs.
The two sides reached a conditional agreement on the deal earlier in
April. The agreement recommends an all-cash offer by FedEx for all
issued and outstanding ordinary shares, including shares represented by
American Depositary Receipts of TNT Express for a cash offer price of
€8.00 per share.
Earlier this week, TNT reported a
1.3% year-on-year increase in first quarter revenues
to €1.6bn, but operating income for the period slipped to a €11m loss
from a €15m gain last year and net profits slipped to a loss of €19m
this year from a neutral result for the same period of 2014.
Source: companies
Notes: TNT financial figures converted using XE.com 31/12/2014 exchange rate for comparision purposes only
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