02085209346

European Confirmation to Acquire TNT Express

featured image
1 Aug 2015
By admin
FedEx Corporation

European Union officials should rule on FedEx Corporation’s proposal to purchase Dutch logistics company TNT Express by Aug 3.

On Friday, June 26, FedEx submitted an important letter to the European Commission to acquire governing confirmation order for the approximately $5 billion purchase of TNT Express. It is a prime agreement in a 42-year business history of FedEx.

According to the primary report from the commission decision-making committee of EU could take up to 25 working days but another 10 days can also be prolonged.

FedEx was also requested to submit its official proposal documents with the Authority of Netherlands for Economic Markets before Tuesday, June 30. FedEx desires to deal quickly during the first half of 2016. Shares of FedEx closed – on Monday with a decrease of $2.64 – at $171.02.

TNT and FedEx are about to make the largest parcel delivery and logistic setup in entire Europe with a wide network. FedEx had reached a deal to buy TNT which was disclosed in April. No doubt, FedEx has already an extensive logistics network and like a shining star in the world of air freight and parcel delivery as compared to DHL and United Parcel Service of Europe.

Purchase of TNT group would give FedEx a well-developed land carriage system in Europe. It will also provide a good position to the company and expected e-commerce development in Europe.

FedEx chairman, president and chief executive officer Frederick W. Smith, said in a statement that this deal permits FedEx to rapidly develop its portfolio of international transportation solutions to take benefit of market movements particularly the continuing growth of global e-commerce.

It is also important to place the FedEx in the section of greater long-term profitable growth. European market shares of FedEx will increase with the acquisition of TNT. Presently, FedEx is smallest logistic setup in European logistics as compared to DHL, UPS and TNT but not in the world anyway.

After the approval of the acquisition, FedEx could swap United Parcel Service as the second largest logistics group in Europe. According to the FedEx, it will fund the buying process with about $2.3 billion in new dues, $1.7 billion in cash from current funds and $1 billion from the present credit facility. Purchase of TNT could help the FedEx to increase the income of the company, which missed revenue estimates in its financial fourth quarter.

FedEx stated that the revenue and earnings were depressingly impacted by reduced fuel prices, currency exchange rates and special charges concerning to pension changes and a lawsuit payment. FedEx described the net revenue for the financial fourth quarter as $753 million, or $2.66 per share and remained untouched from $753 million, or $2.54 per share, a year before.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2020 All Rights Reserved Pakistan Cargo 4u