The European Union’s (EU) competition regulator has temporarily interrupted its probe into the acquisition of Dutch express delivery firm TNT Express NV (AMS:TNTE) by US rival United Parcel Service Inc (NYSE:UPS) in order to gather more information, according to a European Commission (EC) official cited by Reuters.
The EC will continue its investigation into the EUR5.16bn (USD6.72bn) deal as soon as it has all needed information, the official said, without elaborating.
The pair agreed on the transaction in March 2012, when UPS said it would step up its growth strategy, while diversifying its geographic presence and boost offering.
Meanwhile, the EC started on 20 July a 90-day in-depth probe into the merger, after its preliminary investigation revealed potential competition worries in the small parcel delivery services sector, mainly the international express services in a number of EU states. It said at the time that the combined group would have a very high share of these markets. The regulator was notified on the deal on 15 June, it said.
The Commission was to deliver its ruling on 28 November, but the decision to halt the probe could delay the process, Reuters said.
The combination is seen to create a top global logistics groups with annual revenues of over EUR45bn and a wider integrated global network, benefiting the customers of both parties and provide increased opportunities for employees, the companies have said.
The buyer expects the merger to generate annual run-rate pre-tax cost synergies of some EUR400m to EUR550m by the end of the fourth year, it has said.
The deal, to be financed with UPS’ existing cash and new debt, will see TNT going private.
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