United Parcel Service (UPS) has agreed to pay TNT Express EUR9.50 per share, up from the EUR9 per share that the U.S. parcel delivery giant made in an earlier bid to buy out its Netherlands-based competitor.
A joint statement by the two companies said the executive and supervisory boards of TNT Express unanimously supported the offer, which puts the sale at about EUR5.16 billion ($6.77 billion).
“The transaction will create a global leader in the logistics industry with more than EUR45 billion ($60 billion) in annual revenues and an enhanced, integrated global network,” the statement said.
The buy-out of TNT Express, Europe’s second largest package delivery service, by UPS, the world’s biggest, will pave the way for greater access by the Atlanta-based company into the European market.
“The combination underlines UPS’s long-standing commitment to Europe, where it has maintained a presence since 1976, by strengthening its product capabilities through the addition of TNT Express’ leading intra-Europe road freight network. The combination also enhances UPS’s existing position in fast-growing regions such as Asia-Pacific and Latin America,” the statement said.
UPS said it intends to finance the offer of EUR5.16 billion by utilizing $3 billion in existing cash on balance sheet and through new debt arrangements.
TNT Express earlier turned down a EUR4.9 billion takeover bid by UPS, but both parties said talks were ongoing.
UPS tendered the bid as some shareholders of TNT Express urged for a company-board shakeup and increase in shareholder value after the European group suffered falling revenues as the global economic slowdown prompted customers to choose lower-cost shipping over air transport.
Photo: TNT Express
