UPS Hits Snag in European Acquisition
United Parcel Service Inc. (NYSE: UPS) said today that it has received a "statement of objections" from the European Commission (EC) related to the company's $6.7 billion acquisition of TNT Express NV. Calling the document "a normal step in a second phase merger procedure," UPS said that it and TNT will respond "within a couple of weeks."
The EC document is confidential, according to UPS, which did not specify any of the objections raised by the EC, but did say that they addressed "the competitive effects of the intended merger on the international express small package market in Europe." According to the UPS press release:
The combined company will help create a more efficient logistics market, thereby improving the competitiveness of Europe and the solutions offered to businesses and consumers. Those benefits include future improvements to e-commerce to help achieve the EU objective of a Digital Single Market. In addition, customers and consumers will benefit from a broader portfolio of services and better global access, along with lower supply-chain costs overall and improved service levels in terms of timing and reliability.
The acquisition, if it is approved, would double UPS's footprint in Europe and would immediately add to the company's earnings.
Shares of UPS are down about 2.2% at $72.01 in a 52-week range of $66.46 to $81.79.