UPS Acquires TNT Express

March 19, 2012
UPS finally closes the deal with a $6.8 billion offer for TNT.

After several weeks of negotiations, parcel delivery giant United Parcel Service Inc. and express delivery company TNT Express N.V. have reached agreement whereby UPS will acquire TNT in an all-cash deal estimated at $6.8 billion. TNT’s executive and supervisory boards unanimously intend to support and recommend the offer. TNT had earlier rejected an offer from UPS estimated at $6.4 billion.

The combination of UPS and TNT Express will create a logistics company with annual revenues of more than $60 billion. Together, UPS and TNT Express will offer customers an integrated global network. UPS believes that the cumulative pre-tax implementation costs related to achieving synergies from the acquisition will be approximately $1.31 billion over the four-year integration period.

Following the transaction, around 36% of the combined group’s revenues will be generated outside the United States, up from 26% today at UPS. The combination underlines UPS’s commitment to Europe, where it has maintained a presence since 1976, by strengthening its product capabilities through the addition of TNT Express’ Intra-Europe road freight network. The combination also enhances UPS’s existing position in fast growing regions such as Asia-Pacific and Latin America.

PostNL N.V., holder of approximately 29.8% of the outstanding shares of TNT Express, has committed itself to tender its shares under the offer if and when made. The irrevocable contains certain customary undertakings and conditions.

While acknowledging that some layoffs could occur, UPS and TNT did not offer any estimate as to how many employees may be affected by any elimination of redundancies.

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