The week that was: 23 March 2012
Rounding up the biggest stories of the week in the mail and express industry, as drawn from the pages of Post&Parcel…
UPS agrees deal to buy TNT Express
TNT Express agreed to a deal for its acquisition by UPS, after the US parcel delivery giant offered an increased offer valuing the company at about EUR 5.16bn ($6.77bn USD).
The companies issued a joint statement confirming the agreement based on a value of EUR 9.50 per share, which remains subject to shareholder approval, the possibility of a significantly bigger offer from another rival, and consent by European competition authorities.
UPS predicted it will need to invest one billion dollars in integrating the global network of TNT Express into its own operations, in a process that should take four years to complete because of its “customer-centric” nature.
USPS faces political backlash against plant closure plan
One of the top US lawmakers behind proposals to reform the US Postal Service attacked Postmaster General Patrick Donahoe over his “disastrously flawed” plans for major cutbacks in the US postal network.
The criticism from Senator Susan Collins was part of mounting political backlash against US Postal Service plans to reduce the size of its mail processing network by 50%, which bubbled up this week with expectations that postal reform legislation could return for Senate debate as early as next week.
Collins later revealed “secret” figures from USPS suggesting its plant closure plan would not have quite the cost-saving benefits that the Postal Service had said it would.
EU allows government to take over Royal Mail legacy pension
The European Commission gave the green light to the UK government to take over Royal Mail’s legacy pension costs, paving the way for privatisation.
The move will mean allowing Royal Mail to transfer around GBP 28bn (EUR 33.5bn) in liabilities to the state, and relieve the postal operator of a pension deficit of about GBP 8.4bn (EUR 10bn).
The European Union’s executive branch also confirmed that it will allow the UK government to provide EUR 1.311bn in state aid separately to assist in the restructuring of Royal Mail.
And finally…
FedEx Corp revealed some good results for its latest quarter this week, helped by e-commerce growth, but its achievements were perhaps a little drowned out this week by the moves of other global integrators…
