FedEx and TNT deal on track but clearance could take a year

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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FedEx set to buy TNT Express for $4.8bn

US parcels and logistics giant FedEx has made a $4.8bn  bid to acquire rival operator TNT Express of the Netherlands, with both sides reaching a conditional agreement on the deal.
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.
The surprise transaction gives TNT Express an implied equity value of approximately €4.4bn ($4.8bn).
Fred Smith, chairman and chief executive of FedEx Corp, said: “We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe.
"This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”
Tex Gunning, chief executive of TNT Express, said: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders.
"Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run."

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-and-tnt-express-agree-on-recommended-all-cash-public-offer-for-all-tnt-express-shares.html

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