FedEx revives talks to buy rival TNT
FedEx is in preliminary talks to acquire TNT, its smaller Dutch rival, in a deal that would bolster the package-delivery company’s parcel network throughout Europe.
While FedEx and United Parcel Service have coveted TNT’s parcel business, they have been reluctant to take on the Dutch company’s slower-growing postal division.
UPS’s interest in snapping up TNT has waned in the past decade as it built its own European delivery network. The company recently forged closer ties to TNT’s main rival, DHL, through its agreement to ferry the Deutsche Post unit’s packages between North American cities.
Deutsche’s GBP 3.7bn acquisition of Exel, the UK-based logistics group, in 2005 has been the sector’s biggest deal to date.
On Friday, FedEx’s market capitalisation was USD 22.8bn (GBP 11.5bn), while TNT stood at USD 11.3bn.
TNT, which primarily operates in Europe and North America, divides its business into two segments: express and mail.
FedEx remains the largest player in the market it pioneered: express delivery. While its biggest operations remain in the US, it has sought to expand overseas.
In Europe, the company aims to build out both its intra-continental network while establishing a local presence in discrete countries. FedEx bought ANC in 2006 to strengthen its domestic express-delivery business in the UK.
In June, FedEx posted its first quarterly loss in 11 years and projected earnings that fall short of analysts’ estimates because of fuel costs and declining demand.
FedEx is in preliminary talks to acquire TNT, its smaller Dutch rival, in a deal that would bolster the package-delivery company’s parcel network throughout Europe.
A deepening economic downturn and mounting fuel costs have damped demand for package deliveries, triggering a sell-off in the shares of the world’s largest couriers and helping to revive the on-again, off-again discussions on a potential FedEx-TNT tie-up first broached years ago.
While FedEx and United Parcel Service have coveted TNT’s parcel business, they have been reluctant to take on the Dutch company’s slower-growing postal division.
UPS’s interest in snapping up TNT has waned in the past decade as it built its own European delivery network. The company recently forged closer ties to TNT’s main rival, DHL, through its agreement to ferry the Deutsche Post unit’s packages between North American cities.
Deutsche’s GBP 3.7bn acquisition of Exel, the UK-based logistics group, in 2005 has been the sector’s biggest deal to date.
On Friday, FedEx’s market capitalisation was USD 22.8bn (GBP 11.5bn), while TNT stood at USD 11.3bn.
TNT, which primarily operates in Europe and North America, divides its business into two segments: express and mail.
FedEx remains the largest player in the market it pioneered: express delivery. While its biggest operations remain in the US, it has sought to expand overseas.
In Europe, the company aims to build out both its intra-continental network while establishing a local presence in discrete countries. FedEx bought ANC in 2006 to strengthen its domestic express-delivery business in the UK.
In June, FedEx posted its first quarterly loss in 11 years and projected earnings that fall short of analysts’ estimates because of fuel costs and declining demand.
