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Pallets page 20: Pall-Ex presses on in Europe p.20⁄ Faster to Germany p.22 UPS’s TNT purchase to be first ‘global’ express merger

UPS has agreed to buy rival carrier TNT Express for about €5.16 billion, slightly more than the initial €4.9 billion offer rejected by the Dutch-based operator earlier this month. TNT’s executive and supervisory boards said they would unanimously intend to support and recommend the offer. While the four global express giants – UPS, TNT, FedEx and DHL – have acquired many companies in the past, including important national and regional players, this would be the first merger between two of the main global players. It would reduce the number of global players to three.

In a joint statement, the two companies said the merger would

create “a global leader in the logistics industry with more than €45 billion ($60 billion) in annual revenue and an enhanced, integrated global network.” and the two companies’ strengths would complement each other. (DHL’s total annual revenue for 2011 was about €53bn while for FedEx it was about €30bn or $39m.) Integration of TNT Express’ intra-Europe road freight network would expand UPS’s logistics solutions there and would deepen UPS’s existing position in fast-growing regions such as Asia-Pacific and Latin America. At the same time, TNT Express customers would “benefit from

UPS’s unparalleled access to the North American market, as well as access to its logistics solutions, such as global freight forwarding and distribution capabilities.” UPS added that the purchase would deliver around €400

to €550 million in “pre-tax cost synergies” in about four years’ time. The transaction would accelerate its growth, increase its geographic diversity and significantly enhance its ability to serve its customers’ complex global logistics needs. With the purchase, around 36% of the combined group’s revenues will be generated outside the US compared with 25% currently. With a combined network and enhanced IT platforms,

customers will have access to deeper product capabilities and broader reach through the expanded geographies served, giving them more choice and flexibility to support the growth and globalization of their businesses. The combination also will offer

A French high-speed parcels train headed for London on 20 March to demonstrate the possibilities of a planned European network. Full story page 3

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Ireland page 25: Dentressangle reshapes logistics p.25/Shannon Airport p.29

And then there were three NEWS

employees greater opportunities to be part of a global, growing and respected business, the statement added. UPS also said that it recognised the expertise of TNT Express’

leading road freight network in Europe and would “create a meaningful centre of excellence for marketing, sales, and operations in the Netherlands.” In a press conference to announce the deal, UPS chairman and

CEO Scott Davis said that integration of the two companies would cost around $1bn and take about four years. The process promised to be “complex and long,” he added. Many aspects of the merger have yet to be decided. UPS

indicated that, ultimately, there would probably be a single brand name and that would be UPS, but the process would be a long one, they said. They also indicated that UPS’s existing Cologne hub would be the merged operation’s ultimate long-haul air hub for Europe, but that there could still be an important role for the TNT facility at Liege, Belgium.

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New Liverpool box terminal in 2015

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