UPS trumps FedEx in race to buy TNT


The Dutch delivery company TNT NV may fall into the hands of its US rival United Parcel Service (UPS), following FedEx’s short-lived attempt to acquire the European company.


Early this week, Britain’s Sunday Telegraph reported that UPS was planning a $17 billion bid for TNT, which resulted in the wild fluctuation of TNT’s share price.

Speculation over the UPS talks followed last month’s report on FedEx’s interest in acquiring TNT. Independent research company Datamonitor has previously suggested that FedEx intended to buy the European company to counter a negative outlook in the US market.

FedEx has reportedly abandoned the bid.

While both parties are declining to comment on the possibility of mergers, president of UPS’s international business Dan Brutto told Reuters that UPS was consistently looking “at different things and try to fit [them] into the puzzle.”

However, he added acquisition was not under the company’s immediate attention.

UPS has a market value of over USD 66 billion, while that of TNT is estimated at around USD 14 billion.

Analysts said TNT’s express delivery unit, which comprises over 60 per cent of sales with economic resilience, is the key attraction for international players who intend to expand their European market penetration.

In Europe, UPS and its US rival FedEx are estimated to have less than ten per cent market share, while TNT holds 24 per cent.

“Operationally, TNT has a very extensive and inexpensive road network, which is a key advantage versus the more air-focused networks of FedEx, UPS and to come degrees also DHL,” ING analyst Axel Funhoff said.

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