Friday, August 22, 2008


United Parcel Service, the world's largest package carrier, is reportedly planning a $15.2 billion bid for its Dutch rival TNT, according to British media reports.

According to London's Telegraph newspaper, UPS made an informal approach to buy TNT — Europe's second-biggest delivery service — and the two companies have held preliminary talks.

For UPS, buying TNT would mean gaining access to a full European air- and road-delivery network, including an air hub in Liege, Belgium, and a trucking center in the Dutch city of Arnhem.

According to the Telegraph, UPS competitor FedEx hasn't ruled out bidding for TNT, a company that serves more than 200 countries and employs 161,500 people.

Both UPS and TNT have declined to comment, saying they don't respond to market rumors or speculation.

Kim Caughey, an investment analyst at Fort Pitt Capital Group in Pittsburgh, interviewed by, said that although she hasn't looked at the details of the deal "it fits with the direction the company has discussed with investors."

But Dan Ortwerth, an analyst at Edward Jones in St. Louis, also interviewed by ajc, said he doubts UPS will buy TNT.

"UPS already has significantly developed networks of its own in TNT's coverage map," he said. "UPS has its own highly disciplined and efficient system, and I just can't see them absorbing a system on the scale of TNT” and thereby having to bring it up to UPS standards "in a way that would benefit shareholders."

However, Ortwerth added that he does expect to see a gradual consolidation of the industry on a global scale, a movement that's already under way.

1 comment:

Ernie Schell said...

According to a Wall Street Journal report on July 24, the FedEx-TNT talks have gone nowhere...and that FedEx faces losses with higher fuel costs, which would mitigate any acquisitorial/expansion ideas. While true, these were predictable for some time, so why engage in talks to begin with? Says the WSJ, when talks began TNT's stock was down >40%, but after talks started the stock recovered, which scotched the deal.

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