FedEx-TNT deal edges forward

FedEx’s potential $4.8bn takeover of TNT has edged further forward as the US express giant has filed regulatory paperwork to the European Commission.
Over the weekend, the New York Stock Exchange-listed logistics company confirmed it had submitted the required filing to the EC to obtain regulatory clearance in connection with the intended recommended public cash offer for all issued and outstanding ordinary shares in the capital of TNT Express.
It added that it expected to submit a request for review and approval of its offer document with the Netherlands Authority for the Financial Markets before June 30, as required under Dutch law.
“Based on the required steps and subject to the necessary approvals, closing of the Offer is anticipated in the first half of calendar year 2016,” FedEx said.
Other approvals will also need to be gained, with the offer conditional on FedEx also obtaining the required competition clearances in China, Brazil and, to the extent applicable, the US.
Under the planned deal, the relatively small TNT air fleet of 54 freighter aircraft would 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.

Source : http://www.aircargonews.net/news/airlines/single-view/news/fedex-tnt-deal-edges-forward.html

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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 updates on freighter retirements and TNT acquisition

FedEx has provided more details on its decision to retire freighters early, while also providing an update on its proposed takeover of TNT Express and saying that it will continue on the acquisition trail.
Speaking shortly after the announcement of its fiscal year fourth quarter results, the US express giant said its decision to retire 15 aircraft and 21 related engines and also adjust the retirement schedule of an additional 23 airframes and 57 engines was part of a profit improvement plan.
FedEx chairman, president and chief executive officer Frederick Smith said: “We’re getting rid of very inefficient fuel burning aircraft of high maintenance to a newer fleet, better maintenance, better reliability, better fuel efficiency.
“So we’re balancing our fleet in the US and around the world and that’s part of our profit improvement plan.
“We need to buy [to modernise the fleet] 12, 15 airplanes a year and we continue to do that and you can count on us continuing to that because they are aluminum, they oxidize, they wear out and the new models fortunately burn a lot less fuel and are much more reliable.
“One of the reasons that the fleet can go down is that we don’t need as many spares with the new technology airplanes as we did with the old ones.
FedEx Express president and chief executive David Bronczek said the planes that were to be retired were “basically parked in the desert”.
“They were in engine repair that was going to be too expensive to bring back,” Bronczek said.
The company also said it hoped to complete the acquisition of TNT earlier than expected, although no new time line was provided.
In May, it predicted it would take a year for the purchase to gain regulatory clearance.
Executive vice president, general counsel and secretary Christine Richards said: “We’re doing a tremendous job. We are preparing to submit our initial offering documents as required by Dutch law by the end of this month.
“And we are well underway with the preparation of the necessary filings with competition authorities.
“We have been in consultation with European Competition Commission and continue to believe FedEx and TNT operations are highly complementary in Europe and we do not believe that the transaction faces any competition issues for the commission.
“So we’re in good shape. We’re going to try to get this done as quickly as we can.”
FedEx said it would also continue to be “aggressive in the acquisition space” over the coming years.
“As to any specifics about any specific space,” said executive vice president and chief financial officer Alan Graf. “I will just say that depends on the fit, the culture, the price and all three of those things are vital.”

Source : http://www.aircargonews.net/news/airlines/single-view/news/fedex-updates-on-freighter-retirements-and-tnt-acquisition.html

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FedEx-TNT deal to create third force in express

FedEx’s planned takeover of rival carrier TNT would create a third force in the express market – and unlike UPS’ attempted takeover 2½ years ago, it would succeed, the leaders of the two companies predicted at a press conference this morning.
The acquisition would bring TNT’s “exceptional” road platform into the FedEx fold, helping to strengthen what had been a relatively weak part of the FedEx portfolio, said the latter’s chief executive, DavidBronczek, with around 86 per cent regional coverage.
In contrast, FedEx has a strong air network in Europe, as well as in other parts of the world.
TNT chief executive, Tex Gunning, anticipated that the European road network created “would be the envy of the industry.”
At the same time, the relatively small TNT air fleet of 54 freighter aircraft would 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 proposed UPS takeover.
TNT's owned and leased fleet includes B777Fs, B747Fs, and a combination of BAe 146, Boeing B737Fs and B757Fs. 
Bronczek argued that, far from reducing competition, the takeover “would increase competition in Europe by creating a third strong competitor…which would benefit customers over the long term.”
Gunning said that the deal was attractive to his company because it would lead to a more certain future.
He predicted that, this time, the takeover would clear the regulatory hurdles because “this is much simpler than the UPS deal – there, the overlaps were far bigger.”
However, the lower synergy between the two companies was reflected in the price that FedEx would pay for TNT - €8 per share compared with the €9.50 that UPS had been prepared to offer.
The lower price was also a reflection of a “more complex” European economy that had developed in the intervening period.
Bronczek said he did not expect the relatively low price to lead to rival bids for TNT, saying: “We feel very comfortable with our offering.” Gunning said that Post NL had indicated that it would be willing to share its 14.7 per cent share in TNT.
The offer launch is anticipated during the second quarter of 2015 and the transaction is not expected to complete until the first half of 2016, a reflection of the slow pace of government and regulatory authorities, said Gunning.
The transaction is subject to a €200m break fee.
But questioned on how the two companies had managed to agree a takeover in principle within six weeks of a TNT capital markets day, Gunning said: “Like the girl next door, you already know each other very well.”
No decision has yet been made on the tricky question of brand identity. The FedEx name is very strong in North America while TNT is well known in Europe and other markets.
Gunning added that the deal would improve job security for TNT employees and that he anticipated that there would be few if any redundancies as a result of the takeover.
TNT’s main air hub at Liege would be maintained and extended, and FedEx’s hubs in Paris and Cologne would also be retained.

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-tnt-merger-to-create-third-force-in-express.html

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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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