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Implications of Proposed FedEx-TNT Acquisition

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by Gopi. Su
29 June 2015

In April 2015, FedEx Corporation announced that it is acquiring Netherlands based international courier delivery company TNT Express for USD 4.8 billion (about EUR 4.4 billion). The takeover is expected to widen footprint of FedEx's express business across key markets including Europe and the Middle-East, where the US based global delivery company has relatively smaller market share. However, the acquisition still needs to be approved by EU antitrust regulators, who objected a similar takeover attempt by UPS in 2013. This article describes the implications associated with the takeover, which includes FedEx's entry into new markets, financial aspects and change in service providers' landscape in key markets. The deal is expected to give rise to a third large international express company after DHL and UPS in Europe. The above points are also focused in customer's perspective.� In addition, the article also studies whether the acquisition will be approved by the EU regulators. Why FedEx is buying TNT Express? In recent times, FedEx has been making a number of takeovers. In January, the international express company purchased Genco Distribution Systems Inc., a third-party logistics provider for USD 1.4 billion. Genco specializes in the product-returns business. In December 2014, the company acquired Bongo International, an international e-commerce technology solutions company. It is observed that the acquisitions are aimed at expanding FedEx's service capabilities in the growing retail and e-commerce markets.   Author: Gopi. Su

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