Wed, Feb 28, 2018 - Page 10 News List

UPS sues EU for US$2bn over blocked TNT merger

AP, BRUSSELS

US delivery giant United Parcel Service Inc (UPS) is suing the EU’s anti-trust regulator for blocking a merger with Dutch firm TNT Express NV, which was later snapped up by UPS rival FedEx Corp.

UPS is seeking 1.742 billion euros (US$2.15 billion) in compensation.

In a company release on Monday, UPS said its proposed acquisition of TNT would have helped consumers.

The Atlanta, Georgia-based company said its compensation request was based on estimates of lost business made by independent experts.

UPS dropped its US$6.9 billion bid in early 2013 after pushback from the European Commission, which feared that the tie-up would reduce choices for customers and drive up prices.

However, the EU’s General Court annulled the commission’s decision in March last year.

The commission is appealing the ruling to the European Court of Justice, Europe’s highest court, and a decision is expected later this year.

The UPS claim, which was filed in December last year, but not publicly disclosed until this week, is suspended until the Court of Justice rules on the European Commission’s appeal.

UPS has claimed that the European Commission unfairly changed its economic analysis of a UPS-TNT combination without telling UPS.

“We feel strongly that the proposed acquisition would have constituted a good deal for logistics customers, as well as ... consumers,” UPS spokesman Gregg Svingen said, adding that “UPS continues to remain bullish on Europe,” which accounts for half of UPS’ international revenue.

Svingen declined to discuss specifics of the legal proceedings.

FedEx bought TNT in 2016 for about US$4.8 billion to expand its presence in Europe.

However, the Memphis, Tennessee-based company has struggled with the acquisition. Last year, the TNT division was affected by a cyberattack that slowed deliveries and proved costly.

FedEx estimated that it cut last year’s third-quarter earnings by US$300 million.

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