Package delivery giant United Parcel Service Inc. (UPS: Quote), on Wednesday withdrew its $6.77 billion offer for Dutch rival TNT Express N.V. (TNTEF.PK,TNTEY.PK), after the European Commission formally prohibited the proposed deal, citing competitive concerns.
The demise of the proposed deal was expected as the European Commission about a fortnight ago said it will block it, on fears that the deal would impact competition in 15 EU nations.
The European Commission said UPS had not offered enough concessions to allay fears that consumers' interests would be impacted.
UPS said it is upset by the EC decision, but that it will pursue execution of its growth strategy, but that will now will be confined towards smaller acquisitions. UPS will pay TNT a termination fee of 200 million euros for the withdrawal.
Had the deal fructified, UPS would have had access to TNT's impressive networks in Asian markets and Latin America and buttressed its revenues. The deal was to be the largest by UPS in its history, giving the firm an edge over its rival FedEx Corp. (FDX) in Europe.
The two firms announced the deal in March 2012, when UPS agreed to buy the TNT Express for a sweetened offer of 9.50 euros per share. A formal offer was launched in June.
UPS is trading at $81.53, down 0.83%, on a volume of 1.2 million shares on the NYSE.
In Amsterdam, TNT Express traded at 5.55 euros, down 2.72%, on a volume of over 5 million shares.
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by RTT Staff Writer
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