UPS Buying TNT Express For $6.77 Billion
March 20, 2012 by UPI - United Press International, Inc.
ATLANTA (UPI) — United Parcel Service Inc. has agreed to buy European rival TNT Express NV for $6.77 billion in an all-cash offer, the firms announced Monday.
The deal for the Dutch logistics company will extend the presence of Atlanta’s UPS in China and in Latin America. It will also create a mega-firm with $60 billion in annual revenues “and an enhanced, integrated global network,” the companies said in a statement.
Currently, UPS derives 26 percent of its revenue outside of the United States. After the merger, that is expected to rise to 36 percent, the firms said.
Most of the overlap in services is in Europe.
The price of the deal represents a 53.7 percent premium over the unaffected share price of TNT Express on Feb. 16, the day before discussions of the deal became public.
TNT employs 77,000 people worldwide and includes a fleet of 30,000 vehicles. It delivers 1 million parcels on a daily basis.
United Parcel Service has its headquarters in Atlanta and operates in more than 220 countries and territories worldwide.
The companies expect to save as much as $725 million per year in operating costs. The firms said, “All employee rights, covenants, and benefits under current ownership will be respected.”
They also said, “Throughout integration, the selection and appointment of staff for any function within the newly combined entity, will be subject to applicable laws, and be based on the ‘best person for the job’ principle.”
“In case of potential consequences for employees of the combination, the principle of fairness will be applied as to the impact of redundancies on TNT Express and UPS staff,” the companies said without naming a specific number of expected layoffs.