Blocked express parcel company acquisition ‘beneficial’ for Malta
The European Commission’s ban on the acquisition of express parcel company TNT Express by rival UPS, the US giant, has been described as “an extremely beneficial outcome” for Malta’s market, sources close to the local sector said on Tuesday.
On Monday, United Parcel Service dropped its €5.2 billion bid for The Netherlands’ TNT Express after it saw “no realistic prospect” of an approval by European authorities.
UPS had planned to acquire TNT last March to expand its European business, and later even offered to sell off TNT business units to appease competition watchdogs.
It will now pay TNT the agreed €200 million termination fee for dropping the deal.
UPS authorised service contractor for Malta, Airswift Couriers, and TNT Express’ local associate Cassar and Cooper said they were not authorised to comment.
But sources close to the industry welcomed the European Commission’s decision.
“In the courier packet business, there are just four global integrated players besides these two – DHL, now a German company, and FedEx of the US,” the sources told The Times Business. “The proposed merger would have created a hugely dominant competitor, almost a monopoly in some markets. For Malta, it would have been a critical factor.”
The sources underlined how individual customers and business clients rely on the vital network provided by the courier companies – safeguarding this connectivity and ensuring healthy competition is vital to an island economy.
“This is an extremely beneficial outcome in a small market like ours, which is the kind of situation the EU likely had in mind when it banned the deal,” the sources stressed.
UPS’s unsuccessful bid left TNT Express shareholders reeling however, with hedge funds facing losses of over $700 million.
Reuters reported that so-called merger arbitrage funds – which bet on the outcomes of corporate developments like takeovers – are estimated to have owned around 30 per cent of TNT shares before Monday’s news.
Funds had been buying shares in TNT ever since UPS made its first move early last year.