UPS to acquire European rival TNT Express for $6.85 billion

United Parcel Service (UPS), the world's largest package delivery and logistics company, today struck a deal to buy its smaller rival TNT Express NV, after raising its bid to $6.85 billion (€5.2 billion).

The potential acquisition would be UPS's largest in its 105-year history after it purchased Overnite Corp in 2005 for $1.2 billion.

Under the deal that has been approved by TNT's executive and supervisory boards and its biggest shareholder, PostNL, which owns a 29.8 per cent stake, UPS will pay €9.50 per share, a premium of nearly 54 per cent, up from an initial bid of €9 s per share last month.
 
On March 16, TNT Express, Europe's second-largest package-delivery company said that it was still in talks with UPS (See: UPS still in talks with TNT Express on $6.43-bn takeover) after turning down its €9 a share offer on 11 February.

Buying the Hoofddorp, Netherlands-based company, will give UPS a stronghold in Europe, China, Russia, Brazil and India, most of which have high growth potential. It would put UPS on par with Europe's market leader DHL- a unit of Germany's Deutsche Post AG.

TNT, whose name derives from the post-war Australian company Thomas Nationwide Transport, holds a 9.6-per cent market share in Europe, while UPS holds 7.7 per cent, taking the combined stake to 17.3 per cent and nearly on par with DHL, which holds a 17.6 per cent market share.

The acquisition will increase UPS's international sales to around 36 per cent of its total from 26 per cent to over $60 billion (€45 billion).