UPS buyout of TNT Express for US$6.77 billion awaits regulatory approval
2012 03 21
- Details
UPS has agreed to pay US$6.77 billion in cash to acquire TNT Express about one month after TNT Express shareholders rejected UPS' earlier offer of $6.4 billion.
The offer would create a per-share price of slightly less than $12.50. But the deal is subject to approval from European anti-trust regulators, reported Rosewell, Georgia's Air Cargo World.
"The combination of UPS and TNT Express will create a global leader in the logistics industry, with annual revenues of more than EUR45 billion [US$60 billion] and will deliver significant benefits for the shareowners, customers, employees and other stakeholders of both companies," said UPS.
The deal has been approved by the supervisory and executive boards of TNT Express and PostNL, with the latter agreeing to tender its 29.8 per cent stake to UPS.
The deal is expected to help UPS gain a bigger share of business outside the US as 36 per cent of total group revenues will be generated outside the US, up from UPS' current 26 per cent.
UPS said it will finance its offer with $3 billion in cash from its balance sheet and the remainder will come from new debt arrangements.
UPS expects its acquisition to boost profits in the first year and realise annual pretax cost savings of between $525 million and $725 million by the end of the fourth year after the deal is closed.
The combined company will control about 17.3 per cent of the European express market, placing it just behind Germany's DHL Express.
Source Shipping Gazette - Daily Shipping News
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