Dutch package delivery company TNT Express NV (TNTEF.PK, TNTEY.PK) Monday said that the latest appeal by its U.S. rival United Parcel Service Inc. (UPS) to the European Court of Justice regarding the European Commission's decision to prohibit the proposed acquisition of TNT Express does not imply a renewal or reconsideration of the previously proposed offer.
According to TNT Express, it understands that the appeal is intended to clarify the EC's legal assessment of the dynamics of the European express market.
As per reports, UPS said Sunday that it was appealing the EC decision to block its planned merger with TNT Express to challenge the decision so as to ensure there's no precedent that could impact future acquisitions and to continue to ensure competition in the sector. A UPS spokesperson reportedly added that the appeal shouldn't be interpreted as a signal of a renewed interest in the acquisition of TNT Express.
U.S.-based package delivery giant UPS announced its sweetened 9.50 euros per share offer to TNT Express in March 2012. A formal offer was launched in June. If successful, 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.
But, on January 30, Atlanta, Georgia-based UPS withdrew its $6.77 billion offer for TNT Express after the EC formally prohibited the proposed deal, citing competitive concerns. UPS also agreed to pay TNT a termination fee of 200 million euros for the withdrawal.
The demise of the proposed deal was expected as the European Commission previously had indicated that it would block the deal on fears that the deal would impact competition in 15 EU nations.
UPS had revised its offer many times, and had increased its offer of concessions to overcome regulators' antitrust concerns.
According to EC, there are only four integrators in Europe at present, such as UPS, TNT, Deutsche Post AG's DHL Express and FedEx. Meanwhile, UPS reportedly had argued throughout the process that there were at least six competitors, with dozens of other companies also offering such services.
Following the deal termination, UPS stated that it was upset by the EC decision, but that it would pursue execution of its growth strategy, and would be confined towards smaller acquisitions.
In its latest statement, TNT Express said it continues to focus on the execution of its recently announced updated strategy and profit improvement plan.
On March 25, TNT Express revealed its profit improvement plan for the periods between 2013 and 2015, which is expected to affect 4,000 positions throughout the firm. The company said it aims at a leaner organization and reduce costs amid challenging trading conditions and continuing price pressure.
The company anticipates restructuring costs of 150 million euros in the period and it targets 220 million euros in recurring savings by 2015, as a result of its cost efficiency program. By 2015, TNT Express sees an adjusted operating income margin of around 8 percent and sales growth for the period of nearly 2 percent.
In Amsterdam, TNT Express shares are currently trading at 5.78 euros, up 0.02 euros or 0.38 percent.
UPS closed Friday's trading at $83.54, down $0.13 or 0.16 percent.
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