The European Commission has rejected a bid from United Parcel Service Inc. to acquire Dutch delivery and logistics firm TNT Express for 5.2 billion euros (nearly $7 billion).
UPS said two weeks ago that it expected the commission to scuttle the deal, despite the fact that the Atlanta-based company had revised its offer on multiple occasions in an effort to assuage concerns that it would harm consumers.
UPS made an offer to divest TNT’s subsidiaries in 17 affected EU countries, mostly in Eastern Europe but also in Portugal, Spain and Sweden, and allow the buyer to access its European air network for five years. The commission said in a Jan. 30 statement that the buyer would’ve had to have its own networks within each country for such a proposal to have the desired effect.
“We worked hard with UPS on possible remedies until very late in the procedure, but what they offered was simply not enough to address the serious competition problems we identified,” said Joaquin Almunia, the commission’s vice president in charge of competition policy.
After consulting with customers and other parties, the commission concluded the deal would limit competition in 15 EU member states where access to affordable express delivery of small packages is vital for competitiveness.
UPS said in a statement that it offered “significant and tangible remedies” to address the commission’s concerns and that the combined company would’ve been “transformative” for the logistics industry in Europe.
The company will have to pay TNT a $267.4 million termination fee.