FedEx poised to buy TNT in €4.4bn deal
US delivery service FedEx has reached a deal to buy Dutch rival package delivery firm TNT Express for €4.4bn.
The companies "reached conditional agreement on a recommended all-cash public offer of €8 per ordinary TNT Express share," a joint statement said. "The transaction represents an implied equity value for TNT Express of €4.4bn."
The companies employ several hundred employees in Ireland between them. Spokesmen declined to say what effect, if any, the deal will have here.
A TNT spokesman told the Irish Independent the firms would co-operate to ensure redundancies would be "limited" but would not provide details as to where or when the redundancies may occur.
He added: "It is very early in the planning process. The next step will be when FedEx makes a formal offer which is expected to be in the second quarter of this year. We think it is a good deal and we think that it will give employees a more stable future."
The offer represents a premium of 33pc over the closing share price of April 2 and a premium of 42pc over the average share price over the last three calendar months. Tennessee-based FedEx is financing the deal purely from debt.
FedEx is now aiming to take on bigger rivals United Parcel Service (UPS) and Deutsche Post in Europe. UPS previously had a bid for TNT blocked by European regulators in 2013. This was because of concerns that it could stifle competition due to UPS' already-strong European base.
FedEx chief executive Frederick W Smith said the deal would allow the company to "quickly broaden our portfolio of international transportation solution" and "positions FedEx for greater long-term profitable growth". TNT Express boss Tex Gunning said the unsolicited offer came at a time of "important transformations" for the firm.
"Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run," he said.
The European regional HQ of the combined companies will be at TNT Express's headquarters at Hoofddorp outside Amsterdam. TNT Express will sell its airline operations in compliance with applicable airline ownership regulations, and both companies are confident that any anti-trust concerns could be addressed.
The deal has been unanimously recommended by TNT's supervisory board. TNT's largest shareholder, PostNL also said it would tender its 14.7pc stake to FedEx. FedEx has over 300,000 employees and sales of more than $45bn. The company employs 153 people both north and south of the border in Ireland.
TNT Express operates in more than 200 countries and maintains a leading role in the road freight network in Europe. It employs some 65,000 people.
TNT's Irish division employs just under 200. It had sales of over €40m and a pre-tax profit of just over €700,000 in 2013, the latest accounts available, compared to €2.3m in 2012.