Fed Ex to buy TNT?

[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


:rolleyes:

[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 (http://us.ft.com/ftgateway/superpage.ft?news_id=fto071220080225399581)

FedEx in talks to buy Dutch rival TNT

By Lina Saigol (http://us.ft.com/ftgateway/superpage.ft?criteria_value=Lina+Saigol&criteria_name=journalist) in London and Justin Baer (http://us.ft.com/ftgateway/superpage.ft?criteria_value=Justin+Baer&criteria_name=journalist) in New York
Friday Jul 11 2008 17:35
FedEx (http://us.ft.com/ftgateway/superpage.ft?criteria_name=text&criteria_value=%22FedEx%22) is in preliminary talks to acquire TNT, its smaller Dutch rival, in a deal that would bolster the package-delivery company's parcel network throughout Europe.
A deepening economic downturn and mounting fuel costs have hurt demand for package deliveries, reviving merger discussions that have continued in starts and stops for years.
While FedEx and arch-rival United Parcel Service have coveted TNT's European parcel business, they have been reluctant to take on the Dutch company's slower-growing postal division.


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 :cool:

[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 (http://www.forbes.com/markets/2008/07/14/tnt-fedex-delivery-markets-equity-cx_vr_0714markets10.html)

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" (http://www.forbes.com/equities/2008/06/18/fedex-courier-closer-markets-equity-cx_cg_lal_0618markets47.html))

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 :cool:

[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 :ok:

[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 ? :ouch:

[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.

[FougaMagister]

... and so do FedEx. Their N-reg, CDG-based Airbuses are used on continental routes. (The real long-haul is done by MD-11s). After all, they created the business, didn't they?

Cheers :cool:

[JW411]

No TNT pilots should welome this news. In 1986 I was a DC-10 captain for one of George Bachelor's companies based in JFK. George got rid of the DC-10s in his inventory to AA overnght at the beginning of 1986 and I was suddenly looking for another job.

Fedex were hiring and this sounded like a great option.

However, it became apparent during the interviews that I would (quite rightly) have to start at the bottom of the Fedex seniority list.

The job offered was S/O on the engineer's panel on the 727.

It was calculated that by the time I had enough seniority to bid for captain on the DC-10 (which was where I was already) I would be 68 years old!

[free at last]

welcome to reality!!!!!!:)

[layinlow]

JW411

A friend of mine just upgraded to an Airbus Captain with 6 yrs seniority. It all depends how you bid. He just finished IOE.

[Rock_On]

Deal Journal - WSJ.com : Breaking News: FedEx-TNT Talks Returned to Sender (http://blogs.wsj.com/deals/2008/07/24/breaking-news-fedex-tnt-talks-returned-to-sender/?mod=yahoo_hs)

July 24, 2008, 10:00 am
Breaking News: FedEx-TNT Talks Returned to Sender

Posted by Dana Cimilluca
Investors betting FedEx will soon mail a takeover offer to Dutch letter- and package-delivery concern TNT may be disappointed.
http://s.wsj.net/media/deal-journal-eurologo.gifRumors of a possible transatlantic purchase of TNT, which now has a market cap of about nine billion euros (or roughly $14 billion), have swirled ever since the Financial Times reported July 11 that FedEx was in “preliminary talks (http://www.ft.com/cms/s/0/6516dcba-4f7d-11dd-b050-000077b07658.html)” to acquire TNT. That has helped boost shares of TNT nearly 40% since then.
That rise could prove short-lived. People familiar with the matter tell Deal Journal that even though there were low-level talks about such a deal recently–as there have been many times in the past decade–the discussions didn’t lead anywhere.
Buying TNT, with its strong position in the European market, would turbocharge FedEx’s international expansion at a time of flagging U.S. demand and possibly enable it to trim costs at a time of soaring fuel prices.
But those same headwinds the Memphis, Tenn., company faces would limit its ability to pay the price necessary to get a deal done and likely contributed to the talks being aborted. FedEx reported its first quarterly loss in 11 years in June. Even after a recent rebound, its shares have tumbled 27% in the past year–hardly strengthening its M&A hand.
Another hurdle to a deal is UPS, FedEx’s larger rival in the U.S. UPS has also considered buying TNT is the past, with a private-equity partner, according to another person familiar with the matter. It could be expected to compete with FedEx should FedEx ever get serious about a deal with TNT.
Perhaps the biggest deterrent, however, is TNT’s stock. The company might have looked attractive to FedEx with its stock down more than 40% in the past year. But that was before talk of a possible deal surfaced. The ensuing surge alone would likely be enough to send FedEx packing.
–With Douglas A. Blackmon and Alex Roth

[old-timer]

no smoke without fire...

see how it pans out,

[Rock_On]

TNT shares rise on talk of breakup by UPS: traders | Industries | Autos & Transport | Reuters (http://uk.reuters.com/article/tnBasicIndustries-SP/idUKL951382820080729)

TNT shares rise on talk of breakup by UPS: traders

Tue Jul 29, 2008 1:25pm BST
(Adds analyst comment, updates share price
AMSTERDAM (Reuters) - Shares in Dutch mail company TNT NV (TNT.AS: Quote (http://uk.reuters.com/stocks/quote?symbol=TNT.AS), Profile (http://uk.reuters.com/stocks/companyProfile?symbol=TNT.AS), Research (http://uk.reuters.com/stocks/researchReports?symbol=TNT.AS)) gained more than 4 percent on Tuesday and traders cited media reports saying U.S. rival UPS (UPS.N: Quote (http://uk.reuters.com/stocks/quote?symbol=UPS.N), Profile (http://uk.reuters.com/stocks/companyProfile?symbol=UPS.N), Research (http://uk.reuters.com/stocks/researchReports?symbol=UPS.N)) and a private equity group want to buy and break up the company.
"There is speculation now that a private equity firm wants to buy the mail division and UPS the remainder," trader Rik Zwaneveld at AFS Brokers said.
TNT declined to comment.
Its stock has fluctuated wildly in recent weeks after media reports said U.S. competitor FedEx (FDX.N: Quote (http://uk.reuters.com/stocks/quote?symbol=FDX.N), Profile (http://uk.reuters.com/stocks/companyProfile?symbol=FDX.N), Research (http://uk.reuters.com/stocks/researchReports?symbol=FDX.N)) was in talks to buy the company. The Wall Street Journal last week said the talks had ended. Neither company has commented on the reports.
TNT shares were 4.2 percent higher at 22.80 euros by 7:53 a.m. EDT, outperforming a 0.7 percent lower DJ Stoxx industrial goods and services index.
Analysts said the company is an attractive takeover target because of its express delivery operations in Europe and Asia.
"Strategically it would make a lot of sense for either FedEx or UPS to go after TNT's express division. Equally strategically, it would make sense for a private equity group to go after TNT's mail division," ING analyst Axel Funhoff said.
He said the key question was over financing and what price the parties were willing to pay. TNT holds a partial monopoly of the lucrative Dutch mail market.
Funhoff values TNT at 29 euros on a standalone basis.
(Reporting by Gilbert Kreijger, Joep Polderman and Foo Yun Chee in Amsterdam, Sitaraman Shankar in London; editing by Sue Thomas)

[trashhauler]

It sounds like a couple of players are licking their chops. It was my understanding that TNT was on sound ground. What happened?

[Rock_On]

Coke (UPS) and Pepsi (FedEx) war playing out in slow motion. Looks like DHL is going to end up as RC Cola or Dr. Pepper, at least in the US.