United Parcel Service Inc. (UPS) confirmed Friday that its planned $6.8 billion acquisition of TNT Express (TNTE.AE) of the Netherlands will mandate the sale of TNT's small airline, TNT Airways, before the deal closes.
UPS said European Union rules against foreign ownership of an airline prevent it from being included in the deal.
"UPS and TNT plan to sell [TNT Airways] to comply with EU regulations," UPS spokesman Norman Black said.
In a document filed Friday with the U.S. Securities and Exchange Commission regarding its TNT Express deal, UPS noted that both companies "shall endeavour to ensure that TNT's airline operations will be able to continue to operate despite the change in ownership and control." It also said they'll cooperate to have "a legal, organisational and management structure" in place for TNT Airways that complies with all applicable regulations by the time the deal closes.
Black said the clause is a recognition "that, at the time of closing, a new ownership structure will have to be established for the TNT airline."
TNT Airways, based at Liege Airport in Belgium, has about 45 jets and provides cargo and some passenger charter service, primarily to European destinations.
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UPS Confirms TNT Airways To Be Sold Prior To TNT Express Acquisition | Fox Business