EU objects to UPS acquisition of TNT Express

The European Commission has formally objected to the proposed EUR 5.16bn acquisition of TNT Express by rival integrator UPS. In a joint statement, the two shipping companies confirmed today that they had received a Statement of Objections (SO) from the Commission.

The objection warns of the competitive effects of the merger on the international express small package market in Europe.

UPS and TNT Express insisted that the Commission’s Statement of Objection was a “normal step” in the ongoing phase 2 investigation by the EU officials into the merger.

“It is a confidential document that sets out a provisional position of the Commission and does not prejudge the final outcome of the case. UPS and TNT Express will respond to the EC within a couple of weeks, and intend to preserve the confidentiality of the document and discussions in line with common practice,” said the companies in their joint statement.

“UPS and TNT Express believe competition in Europe continues to be significant, coming from multiple players who offer similar services. The combined company will help create a more efficient logistics market, thereby improving the competitiveness of Europe and the solutions offered to businesses and consumers.”

EU Commission vice president on competition, Joaquin Almunia, recently revealed concerns about whether UPS and TNT’s main rivals in the European express market could provide an effective level of competition with the number of big players reduced from four to three.

UPS and TNT Express claimed today there would be benefits to their merger for the ecommerce industry in Europe, alluding to the EU Commission’s desire for a single digital market in the European Union.

“In addition, customers and consumers will benefit from a broader portfolio of services and better global access, along with lower supply-chain costs overall and improved service levels in terms of timing and reliability,” said the companies.

“UPS and TNT Express have worked closely with the European Commission during this process, and look forward to continuing open and constructive discussions as we work to complete the transaction in early 2013.”