UPS sells TNT Airways
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UPS sells TNT Airways
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.
Read more: UPS Confirms TNT Airways To Be Sold Prior To TNT Express Acquisition | Fox Business
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.
Read more: UPS Confirms TNT Airways To Be Sold Prior To TNT Express Acquisition | Fox Business
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TNT express, TNT airways. I am curious what type of aircraft (45 of them) the subsidiary TNT airways operates? Also what assets express holds. Looks like a possible re-structuring plan for airways.
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According to ch-aviation fleet lists updated monthly, TNT have ended 747 service for EK and are only flying one 777F for them, while EK's last two 747s are operated by Atlas.
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Good news for the TNT guys then ?? Jobs seems secure for now and ASL must be a serious partner for FEDX/UPS etc.. maybe it turns out for the best for the TNT boys 
fingers crossed for some good news for the EU boys.
fingers crossed for some good news for the EU boys.
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Good news for the TNT guys then ??
If I were a TNT Airways employee I would be more concerned with the 1 year grace period that is apparently part of the deal. Or rather what happens when it expire.
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Hedge funds face losses over UPS-TNT deal
Buying TNT shares right now would be a gutsy move. Huge upside if the deal does go through. Downside unknown!
TNTE.AS Basic Chart | TNT EXPRESS Stock - Yahoo! Finance
Hedge funds face losses over UPS-TNT deal - FT.com
Hedge funds face losses over UPS-TNT deal
By Alex Barker in Brussels, and Anousha Sakoui and Sam Jones in London
Hedge fund managers stand to lose hundreds of millions of dollars if the merger of UPS and TNT Express, one of the largest European deals this year, falls apart after unexpected extensive competition objections from the European Commission.
So-called merger arbitrage funds piled into Dutch logistics company TNT this year, expecting to pick up healthy profits as the deal neared completion at a premium to the companys share price.
For the past week the market has been giving the deal just a 50:50 chance of success. With those odds, some merger arbitrage funds have thrown in the towel but others stand to lose even more money if the deal collapses.
There is no analysis you can do on this, said one arb specialist. You are in uncharted territory. Ive seen a lot of legal work show one result and the same in-depth analysis shows a different outcome.
Investors trades are not made public so it is not known which funds hold large positions or might face big losses, though many of the hedge fund industrys biggest names have been closely following the transaction.
The strength of the commissions objections to the UPS-TNT tie-up have surprised investors and the companys executives, who had confidently predicted that the EU would grant approval in August after a fast-track investigation.
Brussels instead opened a full antitrust probe and concluded that the deal damaged competition in the cross-border express parcel market in 29 European Economic Area countries. Only in Liechtenstein was the combined groups presence not harmful, according to people familiar with the Commissions formal objections.
The fate of the deal rests on whether UPS can overturn some of Brussels key arguments most importantly on the definition of the market and shape a package of asset sell-offs that will address remaining concerns. Those people involved in the process do not expect the Commissions analysis to change dramatically.
Several factors have driven interest from merger arbitrage hedge funds in the deal: the widely held view that UPS would win fast EU regulatory clearance, or at worst be asked to make piecemeal asset sales; UPSs pledge to pay TNT a 200m termination fee if the deal fell through; and the relative scarcity of other mergers to speculate on.
TNTE.AS Basic Chart | TNT EXPRESS Stock - Yahoo! Finance
Hedge funds face losses over UPS-TNT deal - FT.com
Hedge funds face losses over UPS-TNT deal
By Alex Barker in Brussels, and Anousha Sakoui and Sam Jones in London
Hedge fund managers stand to lose hundreds of millions of dollars if the merger of UPS and TNT Express, one of the largest European deals this year, falls apart after unexpected extensive competition objections from the European Commission.
So-called merger arbitrage funds piled into Dutch logistics company TNT this year, expecting to pick up healthy profits as the deal neared completion at a premium to the companys share price.
For the past week the market has been giving the deal just a 50:50 chance of success. With those odds, some merger arbitrage funds have thrown in the towel but others stand to lose even more money if the deal collapses.
There is no analysis you can do on this, said one arb specialist. You are in uncharted territory. Ive seen a lot of legal work show one result and the same in-depth analysis shows a different outcome.
Investors trades are not made public so it is not known which funds hold large positions or might face big losses, though many of the hedge fund industrys biggest names have been closely following the transaction.
The strength of the commissions objections to the UPS-TNT tie-up have surprised investors and the companys executives, who had confidently predicted that the EU would grant approval in August after a fast-track investigation.
Brussels instead opened a full antitrust probe and concluded that the deal damaged competition in the cross-border express parcel market in 29 European Economic Area countries. Only in Liechtenstein was the combined groups presence not harmful, according to people familiar with the Commissions formal objections.
The fate of the deal rests on whether UPS can overturn some of Brussels key arguments most importantly on the definition of the market and shape a package of asset sell-offs that will address remaining concerns. Those people involved in the process do not expect the Commissions analysis to change dramatically.
Several factors have driven interest from merger arbitrage hedge funds in the deal: the widely held view that UPS would win fast EU regulatory clearance, or at worst be asked to make piecemeal asset sales; UPSs pledge to pay TNT a 200m termination fee if the deal fell through; and the relative scarcity of other mergers to speculate on.
Last edited by edie; 18th Nov 2012 at 21:58.
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So, it appears the EU will not approve the UPS-TNT takeover after all, according to dutch news this morning.
Now what for TNT-Airways? Does this influence the ASL-deal at all?
Now what for TNT-Airways? Does this influence the ASL-deal at all?
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ASL deal won't realise as it was conditioned by the sale of the TNT express group to UPS.
TNT airways will remain part of TNT as it has always been.
By the way, wise decision of the EC, by blocking this sale this will preserve a lot of jobs in Europe within the TNT group.
Nice to see a strong reaction of the EC against the ultraliberalism from the US where the stock market seems to rules the business
TNT airways will remain part of TNT as it has always been.
By the way, wise decision of the EC, by blocking this sale this will preserve a lot of jobs in Europe within the TNT group.
Nice to see a strong reaction of the EC against the ultraliberalism from the US where the stock market seems to rules the business
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TNT shares are tanking TNTE.AS: Summary for TNT EXPRESS - Yahoo! Finance
Down 41% makes you wonder what TNT's future looks like. Time for FedEx to make a move? PostNL dumping too PNL.AS: Summary for POSTNL- Yahoo! Finance
UPS $6.9 billion TNT Express takeover falls apart - Yahoo! Finance
UPS $6.9 billion TNT Express takeover falls apart
UPS walks away from $6.9 billion takeover of TNT Express; TNT shares plummet 50 percent
AMSTERDAM (AP) -- United Parcel Service Inc. has ditched its 5.2 billion ($6.9 billion) takeover of TNT Express NV after learning that European regulators would reject the deal in its current form.
Though TNT will receive a 200 million ($265.5 million) break fee, it faces an uncertain future on its own and nearly 2 billion has been wiped off its share price in Monday trading in Amsterdam. At one point, its shares plunged by 50 percent before recovering somewhat to be trading 42 percent lower at 4.762.
UPS had offered to buy struggling TNT, Europe's second-largest delivery company, in March, to better compete with Europe's largest, Deutsche Post's DHL. But regulators said in October that the deal would lead to over-concentration in the sector.
In response, UPS offered to sell parts of the company's small package operations and airline assets. But after meeting with regulators Jan. 11, UPS told TNT it saw no prospect of the deal being approved and it wasn't interested in further concessions.
In its last earnings report, for the third quarter of 2012, TNT lost 3 million on sales of 1.8 billion. Former CEO Marie-Christine Lombard quit the company in September, mid-takeover, in a move that was criticized as "unethical" by TNT's chairman, Antony Bergmans, and interpreted by some as a sign the deal was in trouble, since she stood to gain a 2.6 million bonus for seeing it through to completion.
She was replaced on an interim basis by CFO Bernard Bot.
In a statement, TNT conceded that the "protracted merger process has been a distraction for management" and that it would now focus on reassuring customers, encouraging employees and making money.
"Management will provide an update on its strategy in due course," the company said.
UPS CEO Scott Davis said he was "extremely disappointed" with the stance taken by regulators on what would have been his company's largest-ever acquisition.
"We proposed significant and tangible remedies designed to address the European Commission's concerns with the transaction," he said, adding that the deal would have benefited customers worldwide and supported economic growth "particularly in Europe."
The European Commission, which would not comment, must publish its review of the deal by Feb. 5. The Commission reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market. It has the power to block deals or to demand concessions, such as the sale of business parts, to safeguard market balance.
Before UPS's bid for TNT Express, some analysts thought rival FedEx Corp. might make a bid for the company, but FedEx executives said in March they had no plans to do so.
SNS Securities analyst Geert Steens said European regulators have signaled they would not view a takeover by FedEx or less likely DPD, a unit of France's La Poste, as problematic. But there is little guarantee either will bid for TNT in the current climate.
Steens said TNT is worth around 4 per share as an independent company, but that its largest shareholder the former Dutch national mail company PostNL will likely keep angling for a takeover as it needs to cut its debt.
Shares of PostNL fell 34 percent to 1.88.
TNT's assets in Asia and Latin America are part of the reason for its attractiveness as a takeover target, but the company's Brazilian operations ran into severe problems in 2010-2011 and were still loss-making in the third quarter of 2012.
Down 41% makes you wonder what TNT's future looks like. Time for FedEx to make a move? PostNL dumping too PNL.AS: Summary for POSTNL- Yahoo! Finance
UPS $6.9 billion TNT Express takeover falls apart - Yahoo! Finance
UPS $6.9 billion TNT Express takeover falls apart
UPS walks away from $6.9 billion takeover of TNT Express; TNT shares plummet 50 percent
AMSTERDAM (AP) -- United Parcel Service Inc. has ditched its 5.2 billion ($6.9 billion) takeover of TNT Express NV after learning that European regulators would reject the deal in its current form.
Though TNT will receive a 200 million ($265.5 million) break fee, it faces an uncertain future on its own and nearly 2 billion has been wiped off its share price in Monday trading in Amsterdam. At one point, its shares plunged by 50 percent before recovering somewhat to be trading 42 percent lower at 4.762.
UPS had offered to buy struggling TNT, Europe's second-largest delivery company, in March, to better compete with Europe's largest, Deutsche Post's DHL. But regulators said in October that the deal would lead to over-concentration in the sector.
In response, UPS offered to sell parts of the company's small package operations and airline assets. But after meeting with regulators Jan. 11, UPS told TNT it saw no prospect of the deal being approved and it wasn't interested in further concessions.
In its last earnings report, for the third quarter of 2012, TNT lost 3 million on sales of 1.8 billion. Former CEO Marie-Christine Lombard quit the company in September, mid-takeover, in a move that was criticized as "unethical" by TNT's chairman, Antony Bergmans, and interpreted by some as a sign the deal was in trouble, since she stood to gain a 2.6 million bonus for seeing it through to completion.
She was replaced on an interim basis by CFO Bernard Bot.
In a statement, TNT conceded that the "protracted merger process has been a distraction for management" and that it would now focus on reassuring customers, encouraging employees and making money.
"Management will provide an update on its strategy in due course," the company said.
UPS CEO Scott Davis said he was "extremely disappointed" with the stance taken by regulators on what would have been his company's largest-ever acquisition.
"We proposed significant and tangible remedies designed to address the European Commission's concerns with the transaction," he said, adding that the deal would have benefited customers worldwide and supported economic growth "particularly in Europe."
The European Commission, which would not comment, must publish its review of the deal by Feb. 5. The Commission reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market. It has the power to block deals or to demand concessions, such as the sale of business parts, to safeguard market balance.
Before UPS's bid for TNT Express, some analysts thought rival FedEx Corp. might make a bid for the company, but FedEx executives said in March they had no plans to do so.
SNS Securities analyst Geert Steens said European regulators have signaled they would not view a takeover by FedEx or less likely DPD, a unit of France's La Poste, as problematic. But there is little guarantee either will bid for TNT in the current climate.
Steens said TNT is worth around 4 per share as an independent company, but that its largest shareholder the former Dutch national mail company PostNL will likely keep angling for a takeover as it needs to cut its debt.
Shares of PostNL fell 34 percent to 1.88.
TNT's assets in Asia and Latin America are part of the reason for its attractiveness as a takeover target, but the company's Brazilian operations ran into severe problems in 2010-2011 and were still loss-making in the third quarter of 2012.
Last edited by edie; 14th Jan 2013 at 11:31.
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TNT Express is now in the most uncomfortable position.
Logistics Markets: Express & Mail
UPS/TNT decision "a blow to free markets"
14/Jan/2013 by Thomas Cullen.
The lack of clarity over the future of TNT Express, UPS in Europe or indeed the European express market appears to owe much to the European Commission (EC) following its decision to prohibit the proposed acquisition of TNT Express by UPS.
What appeared to be a straight-forward if rather large deal to acquire TNT Express was made much more complicated by the behaviour of the European competition authorities, not least in the nature of their communications. That UPS has abandoned the bid, despite the hurdle of a 200m termination fee, illustrates the magnitude of the obstacles that UPS perceived it was faced with to make the takeover work.
The pivot of the negotiations revolved around the competition authorities of the European Commission. The logic of its objections appeared to focus on the number of competitors in the marketplace. The Commission hinted that the removal of TNT Express would reduce the level of competition in the express parcel market. In suggesting remedies for this problem, they were drawn into dismembering the TNT and UPS network, a task which was doomed to fail as such assets are only worth anything as part of a network. It was unclear if the EC truly grasped this point. It was also unclear if they fully understood the complexities of express market, composed of several different markets with only limited interdependence. All of this was compounded by poor communication and a severe lack of transparency.
Joel Ray, Head of Consultancy at Transport Intelligence, commented: "It is hard to see what the EC sought to achieve through the negative stance they took to this deal. Their decision making process looks flawed, caused by a fundamental lack of understanding of the industry. It seems to have been driven by a desire to engineer a market structure through political motivations. European shippers would have gained from the acquisition through a strong new road and air based player. This decision has set the market back many years, and risks reducing competition, not increasing it."
Of the main market players, TNT Express is now in the most uncomfortable position. The company stated today that it will concentrate on the "execution of strategy". However, it has tacitly admitted that its businesses outside Europe have poor prospects and its core European business will have to work hard just to sustain its already squeezed margins. Normally it might be suggested that TNT Express would be vulnerable to takeover, however for TNT Express the problem is the reverse. What investor or trade buyer would want the company now?
One possible candidate would be FedEx. It may be quietly happy that its rival's strategy has been frustrated, yet the prospects of a bid for TNT Express, possibly at a lower price than that of UPS, might also seem obstructed by the same logic that terminated the UPS offer.
UPS, in contrast, has received a set-back to its corporate strategy, although it is hardly a serious one. The company has huge financial fire power and will be able to consider alternative acquisitions in Europe should it wish to do so. Assuming this is regarded as a worthwhile prospect, the potential targets include GLS, which has a smaller, yet not dissimilar, road network to TNT Express. Yet, some people at UPS may be regarding the failure of the bid a relief, with middle management in Atlanta and elsewhere nervous about the prospect of integrating TNT Express.
The European express market is now left with a series of smaller, comparatively weak players, two strong yet frustrated players in FedEx and UPS and a very powerful pan-European and intercontinental competitor in the form of DHL. Indeed it is DHL which is probably the big winner out of this. The prospect of UPS creating a strong capability in DHL's home market can never have been welcome and now it appears to have gone for good.
UPS/TNT decision "a blow to free markets"
14/Jan/2013 by Thomas Cullen.
The lack of clarity over the future of TNT Express, UPS in Europe or indeed the European express market appears to owe much to the European Commission (EC) following its decision to prohibit the proposed acquisition of TNT Express by UPS.
What appeared to be a straight-forward if rather large deal to acquire TNT Express was made much more complicated by the behaviour of the European competition authorities, not least in the nature of their communications. That UPS has abandoned the bid, despite the hurdle of a 200m termination fee, illustrates the magnitude of the obstacles that UPS perceived it was faced with to make the takeover work.
The pivot of the negotiations revolved around the competition authorities of the European Commission. The logic of its objections appeared to focus on the number of competitors in the marketplace. The Commission hinted that the removal of TNT Express would reduce the level of competition in the express parcel market. In suggesting remedies for this problem, they were drawn into dismembering the TNT and UPS network, a task which was doomed to fail as such assets are only worth anything as part of a network. It was unclear if the EC truly grasped this point. It was also unclear if they fully understood the complexities of express market, composed of several different markets with only limited interdependence. All of this was compounded by poor communication and a severe lack of transparency.
Joel Ray, Head of Consultancy at Transport Intelligence, commented: "It is hard to see what the EC sought to achieve through the negative stance they took to this deal. Their decision making process looks flawed, caused by a fundamental lack of understanding of the industry. It seems to have been driven by a desire to engineer a market structure through political motivations. European shippers would have gained from the acquisition through a strong new road and air based player. This decision has set the market back many years, and risks reducing competition, not increasing it."
Of the main market players, TNT Express is now in the most uncomfortable position. The company stated today that it will concentrate on the "execution of strategy". However, it has tacitly admitted that its businesses outside Europe have poor prospects and its core European business will have to work hard just to sustain its already squeezed margins. Normally it might be suggested that TNT Express would be vulnerable to takeover, however for TNT Express the problem is the reverse. What investor or trade buyer would want the company now?
One possible candidate would be FedEx. It may be quietly happy that its rival's strategy has been frustrated, yet the prospects of a bid for TNT Express, possibly at a lower price than that of UPS, might also seem obstructed by the same logic that terminated the UPS offer.
UPS, in contrast, has received a set-back to its corporate strategy, although it is hardly a serious one. The company has huge financial fire power and will be able to consider alternative acquisitions in Europe should it wish to do so. Assuming this is regarded as a worthwhile prospect, the potential targets include GLS, which has a smaller, yet not dissimilar, road network to TNT Express. Yet, some people at UPS may be regarding the failure of the bid a relief, with middle management in Atlanta and elsewhere nervous about the prospect of integrating TNT Express.
The European express market is now left with a series of smaller, comparatively weak players, two strong yet frustrated players in FedEx and UPS and a very powerful pan-European and intercontinental competitor in the form of DHL. Indeed it is DHL which is probably the big winner out of this. The prospect of UPS creating a strong capability in DHL's home market can never have been welcome and now it appears to have gone for good.
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Interesting news. I realise the situation is fluid and there are probably many unanswered questions. One question I have: how was a successful merger with UPS expected to impact TNT pilots (especially longhaul drivers of the 744F and 777F given UPS's existing huge longhaul fleet)? Were significant pilot redundancies expected?
Good luck to all involved!
Good luck to all involved!
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Euro arrogance rears it's ugly head again. This will end up costing Euro jobs as TNT dies a slow death. I say good riddance and let TNT die, then we can come in an pick up the pieces for pennies on the dollar. Or maybe that was UPS' plan all along. Maybe they knew the Eurotrash Commission would never approve the deal, but it allowed UPS to look deep into TNT's books and gather invaluable inside information. Now they back off and put pressure back on the EU to approve or watch TNT die and all those jobs go away.
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Deutsche Post not interested in TNT Express
Does not appear to be an option
Deutsche Post not interested in TNT Express: CFO - Yahoo! Finance
NEW YORK (Reuters) - Germany's Deutsche Post (DPW.DE) is not interested bidding for TNT Express (TNTE.AS) after UPS (UPS) said it was dropping its 5.2 billion euro bid for the Dutch delivery firm, its finance chief said.
"We're pursuing an organic growth strategy, so we are not interested in acquisitions of any kind in the express business, including TNT," he told Reuters in an interview on Monday.
Deutsche Post not interested in TNT Express: CFO - Yahoo! Finance
NEW YORK (Reuters) - Germany's Deutsche Post (DPW.DE) is not interested bidding for TNT Express (TNTE.AS) after UPS (UPS) said it was dropping its 5.2 billion euro bid for the Dutch delivery firm, its finance chief said.
"We're pursuing an organic growth strategy, so we are not interested in acquisitions of any kind in the express business, including TNT," he told Reuters in an interview on Monday.