UPS European Merger Not Affected by CEO Departure (UPS, FDX)
The $6.8 billion merger between United Parcel Service Inc. (NYSE: UPS) and TNT Express is still expected to be completed by early 2013, despite the announcement today that the CEO of the Dutch-based delivery firm is leaving the company. Marie-Christine Lombard abruptly resigned to pursue another career opportunity.
The merger agreement has been slowly wending its way through the European regulatory process, leading to speculation that the some concessions will be required if the merger is to get approval. UPS competitor FedEx Corp. (NYSE: FDX) made a couple of smaller acquisitions in Europe earlier this year, one of a French express delivery company and the other of a Polish firm. The French firm cost FedEx about $200 million, while no details of the Polish acquisition were disclosed. The largest packaged delivery firm in Europe is German-based DHL.
A report at Bloomberg News this morning states that UPS plans to refinance $1.75 billion of maturing debt by issuing bonds, something the company has not done for nearly two years. Current interest on the company's notes is 4.5%, compared with last week's investment grade yield of 2.92%. The UPS bonds may be in line for a Aa3 rating from Moody's, according to Bloomberg.
Shares of UPS are up about 0.2% at $71.99 in a 52-week range of $61.27 to $81.79.
Filed under: 24/7 Wall St. Wire, Management Change, Mergers & Acquisitions, Transports Tagged: FDX, UPS