layinlow

The Financial Times and Bloomberg News is reporting that Fed Ex is in talks to aquire TNT. Rerportedly the market capitalization is $22.4 billion for Fed Ex and $11.3 billion for TNT. Together they would control 60% of the freight market in Europe. Interesting..... if it is true.

Kazamb

If they truely were to control 60% of the market once merged, I doubt clearence would be given by the European competion commission

Morbid

60%... not a chance of them reaching that figure with true figures.

Curiously TNT statement today was:

"Its our polcy not to say anything"

Makes sense though with the way TNT´s shares have been sliding since the begining of the year.... and I know Fed Ex have had their eye on TNT for a long time.

trashhauler

There is no doubt FedEx has longed to increase thier presence in Europe. They announced a while back of their intention to open a Paris base. As in the 70's the fuel crunch has hit home and there is bound to be a lot more interesting movements, or at least rumors of movements coming in the future.
This forum could get very interesting.

joh

there is already a topic about that

6000PIC

Does anyone see the irony here ? FedEx , with the purchase of TNT would gain immediate access to an organized and profitable Domestic European Network they could exploit to their shareholder`s glee. This was denied Deutche Post / DPWN by the US Government Regulators with regards to the former DHL Airways ( AStar , ABXAir ). If the Competition Authorities in Europe were ever to allow this to go ahead , they`ve got no one else to blame but themselves when Europe turns Purple and Brown.
Why don`t Europe and the US just allow the market principle of free and fair competition to rule the day?
Or is it OK if FedEX does business in Europe, while at the same time denying DPWN the legal right to do business in America ?
The level playing field that the USA touts around the world is always tilted in their favour.

EXLEFTSEAT

Wait just a minute. Your scenario benefits shareholders of both companies, regardless of Government interventon. What's the problem? Why compare a Government owned entity like DHL ( at least in a majority of shares or voting shares ) to a shareholder's company. It's the same thing as comparing Airbus
with Boeing, but that's another story.

6000PIC

Nice try at good `ol American deflection and avoidance of the facts. Why compare anything but the facts. Boeing vs Airbus , sorry not gonna bite that hook. Let`s stick with the subject , should FedEx be allowed approval to purchase TNT ? I say not with the present attitude of the US with respect to ownerships laws. .. Any more stories ?

ads1963

FT.com - FedEx in talks to buy Dutch rival TNT

FEDEX, UPS and DHL would than share the market? That sounds like a monopoly! No way the EC will grant that!

FougaMagister

Errrr... as far as I know, a monopoly is when there is only one company on a given market (hence the name). A duopoly is when there's two. I can't see the market being very different with three major express freight companies instead of four...

Cheers

TRIM-RUN

I understand your point and fully agree with you. At the same time why would you want to own an airline operating in north America right now, or in the last eight years? Its better to buy into Fannie May or Freddie Mac as it seems this is where the Fed is spending its last pennies.

Rock_On

FedEx's Face Saver - Forbes.com

FedEx's Face Saver
Vidya Ram , 07.14.08, 10:30 AM ET

LONDON -
Dutch mail company TNT could be just the opportunity that FedEx needs to get away from troubles in its home market.

TNT shares soared 29.9%, or 5.53 euros ($8.77), to 24.04 euros ($38.11), on Monday afternoon trading in Amsterdam after both companies refused to deny rumors that they were in takeover talks. FedEx was flat in morning trade in New York, at $73.93.

"As a matter of policy we do not comment on market rumors," a spokeswoman for TNT said.

As the fourth-largest express delivery service in the world, TNT has been widely seen as a potential takeover target for some time now, with FedEx the most likely bidder.

FedEx's recent poor performance, particularly in the United States, has only fuelled speculation that it would be looking for new growth opportunities. In mid-June, the company reported a quarterly loss of $241.0 million, driven by rising fuel prices and sluggish demand in the U.S. (See "FedEx Doesn't Deliver")

Unlike rival UPS, FedEx has just a small presence in Europe, having slimmed down operations in the mid-1990s when the opportunities in the cross-country market were limited, and domestic market growth was sluggish.

But with a weak outlook for the U.S. market, and with TNT shares falling 28.0% over the past twelve months and trading at 8 times its EBIDTA, its valuation looks relatively cheap.

TNT's business is also a lot less vulnerable to the rising cost of oil. Most of its deliveries in Europe are made by road, unlike in the United States, where express deliveries are sent by air.

"FedEx has always made it a top priority to have a toe-to-toe presence in core UPS markets," said Christopher Combe, an analyst at Jeffries & Company in London.

But the FedEx move, reported by the Financial Times on Saturday, could trigger a rival bid by UPS, which would be anxious to keep its rival out of Europe, Combe added.

FougaMagister

Yet another journalist who hasn't done his research properly!

"Unlike rival UPS, FedEx has just a small presence in Europe (... )", "(...) UPS, which would be anxious to keep its rival out of Europe (...)"

Without getting into the exact numbers, I have experience of both FedEx's CDG hub and UPS's CGN one (and also DHL at EMA), and they both seem to see roughly the same number of movements.

Cheers

layinlow

Surprize! Fed Ex is already in Europe and planning on opening a Paris base. As to the poor performance, They expected a $1.90/share profit and only made it to $1.46 a share. Woe is me, Fed Ex still makes money, just not as much. When you take into consideration one time charges of, buying a large part of the ANG ramp, built two new hangers at MEM, aquired a very large portion of the IND ramp and the ATA hanger, bought a bundle of 757's and made down payments on 777's, not to mention the opening of Hong Kong base, aquistion of major cargo carriers in India and China, $1.46 a share looks pretty darn good to me. I think the reporter should do a lot better investigations before writing. All this is public record as readiliy available. And if the rumor is true, they are double the size of UPS when it comes to air cargo. European regulations, however, are another baliwick and I have no idea what they are.
Personally, I think it would be good for both parties.

hotelmodemetar

That would be nice if they bought some more ATR72s for their feeders also

layinlow

Doesn't TNT already have a bundle of "small wings"? Seems to me I saw a bunch in Liegen when I used to fly into there.

RB

Global Pilot

They already have a large presence in CDG. Heard a rumour the other night whilst passing thru that they want to double the number of feeder aircraft by this time next year.

skyhigh105

FedEx a couple of years ago only came very very close to buying TNT what delayed this I do not know but when I say close there were plans for press conferences and staff announcments with FedEx etc. so this news no comes as no suprise.

FedEx has MAJOR interests in expanding in Europe there is already a Q of Airbuses lined up to arrive into Europe over the next two years and probably beyond replacing some of the Feeder ATRs which will be put on to brand new Feeder routes in the network.

FedEx in the US are just a tiny bit feeling the pinch a bit with the slowdown in the US economy but not in Europe where they are bigger and busier then ever and ectually holing the US end up a bit, expect major expansion and investment off their own bat in Europe and if the TNT thing goes ahead well that would be one smart bit of business.

hotelmodemetar

So if FedEx eventually buys TNT, who is gonna fly those B737s and B744 aircraft then? European pilots or FedEx Pilots only ?

despegue

NO more N-registered, American pilot-flown aircraft on domestic European routes!!!
It is already a disgrace that UPS can do this, while there are many unemployed European collegues.