UPS and TNT Express said today they now expect their merger deal to be completed in early 2013, rather than the fourth quarter of 2012 as they have suggested previously this year.
The announcement came as UPS formally reported the extension of its EUR 5.16bn offer to TNT Express shareholders to the stock exchange today, complying with the Dutch financial regulations. The offer deadline is being extended from 31st August to 9th November, the maximum allowed under the rules.
The delay to the deal stems from the continuing EU Commission investigation into the implications for the level of competition in the European express market if UPS is allowed to buy TNT Express.
UPS said it has been informed by the Commission that the “Phase 2″ investigation should now take an additional 10 days than the previous deadline, 12th December 2012.
The two companies’ joint statement issued today was as follows:
United Parcel Service (UPS) today confirmed that the Offer Period for its public Offer for TNT Express N.V. (TNT Express) is extended to November 9, 2012, as previously indicated on August 22, 2012, and in accordance with the terms and conditions set out in the Offer Memorandum dated June 21, 2012. This confirmation is formally required pursuant to Articles 15 and 16 of the Decree.
The Offer Period has been extended because not all conditions for completion of the Offer, in particular the condition on competition clearance, were fulfilled upon the expiry of the initial Offer Period on August 31, 2012.
UPS and TNT Express also confirmed today they mutually consented to a request from the European Commission to extend the review period for another 10 working days to enable the Commission to fully review additional information related to the transaction.
As a result of this extension, UPS and TNT Express now anticipate completion of the Offer and close of the transaction in early 2013. If and when the currently extended Offer Period lapses without the condition on competition clearance having been fulfilled, an exemption will be requested from the Netherlands Authority for the Financial Markets (AFM) to extend the Offer period again.
During the extended Offer Period, Shares tendered during the initial Offer Period may be withdrawn in accordance with the provisions of Article 15, paragraph 3 of the Decree. Any Shares tendered during the initial Offer Period and not withdrawn will remain subject to the Offer.
UPS and TNT Express remain committed to the Offer and are working closely to fulfill all Offer conditions.
Under the terms of the EUR 5.16 billion ($6.51 billion ) Offer, UPS will acquire TNT Express to create a service leader in the logistics industry and an enhanced, integrated global network. The complementary strengths of both organizations will create a customer-focused global platform that will be a leader in transportation technology and customer service.
The combined network will help facilitate the flow of trade, making customers more competitive not just in U.S. and European markets, but also in markets across Asia and Latin America – helping to stimulate much needed economic growth.
Offer Memorandum, Position Statement and further information
UPS Bidco B.V., (a wholly owned subsidiary of UPS) (the Offeror), is making the Offer on the terms and subject to the conditions and restrictions contained in the Offer Memorandum, dated June 21, 2012. TNT Express has also made available the Position Statement, containing the information required by Article 18, paragraph 2 and Annex G of the Decree in connection with the Offer.
Source: UPS/TNT Express