Fedex, the American parcel delivery company, has agreed to buy its European rival TNT Express in a £3.2 bn deal to boost its services on the continent.
The take-over comes two years after European competition regulators blocked FedEx’s US rival UPS move to buy TNT. The purchase was halted on the grounds that the deal would limit customer choice and reduce the number of companies who could deliver small packages across the continent.
Analysts expect Fedex and TNT to encounter little antitrust difficulties because the American company has a minimal presence in Europe, about 2 percent of European market while TNT has a market share of around 15 percent.
There is no regulatory risk as TNT and FedEx have a combined market share of below the critical level of 25 percent.
TNT is allowed to engage with a rival bidder if a third party makes an offer that is at least 8 percent higher and is committed to making a full bid within eight weeks of that. However in such event Fedex will also be given the opportunity to match any bid.
If FedEx fails to gain a green light from regulators or walks away from the offer, the American company will be liable to pay a 200 m Euro break fee to TNT Express.