Ruling to force sale of TNT shares by Dutch government
The European Court of Justice has ruled that the 11 per cent stake in TNT Group held by the Dutch Government is an obstruction to competition in the market for postal services, which is being liberalised within the EU. The ruling is not a surprise as the EU has adopted a policy stance against State holdings in postal and logistics companies, one which the Netherlands Government supports – in contrast to some other countries in the EU. However, the prospect of both a withdrawal by the Dutch State and a large tranche of stock being available on the market has only increased speculation of a takeover of the remaining parts of TNT Group.
One likely option is that the Dutch State will sell the stock back to TNT itself, with TNT then cancelling the stock. Whether TNT has the desire or ability to support this approach at present is an open question. TNT is already engaged in a programme of stock buyback in order to satisfy shareholders.
In another unrelated development, TNT has signed a deal to buy half of a Chinese road freight transport operator, which TNT wishes to use as the basis for a big expansion of its Express business in China.
TNT announced that it had signed an ‘Equity Transfer Agreement’ with Hoau Group, a Shanghai based road haulier with ‘1100 depots and 56 hubs’ across China. The deal was trailed by a ‘Memorandum Of Understanding’ (MOU) late last year and has yet to be approved at Government level.
If successful the deal will triple the size of TNT workforce inside China to over 12,000 people. For TNT this represents a useful achievement in the competition between the big Express companies to expand globally. Compared to its three big express rivals, DHL, FedEx and UPS, it has lagged behind in the growth of its global coverage.
