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FedEx – TNT Merger to Crush the Competition In Europe

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13 Aug 2015
By admin
Merger Approved

 

FedEx acquisition of TNT expresses for successful small package delivery to meet the needs of customers and according to the policies of the European Commission to crush its competitors

A process of the investigation started by the European Commission against the proposal of FedEx $4.8bn to take over TNT Express over concerns that the deal could decrease the competition prices. According to commission FedEx had the concern on many open markets of Europe for international express and regular small package deliveries. Their fusion would face inexpensive restraints from the remaining two competitors UPS and DHL. This could lead complex rate for traders and consumers.

According to TNT and FedEx, this investigation by the European Commission was the review of phase 2 and it was a monotonous route ofprobe of the commission.

Many marketing companies especially e-commerce greatly reliance on the cheap and trustworthy small package delivery services as well as customers also rely on these services for delivery of their stuffs that they have bought  swiftly, securely and in low-cost at their door said by in-charge of competition policy Commissioner Margrethe Vestager. He further said that FedEx acquisition of TNT would not control the current competition and not show higher price for consumers.

First report issued by the commission demonstrates that DHL and UPS would be the important competitive constraint on the merged entity for most international delivery services. As the planned deal would decrease the rivals of integrators in the EEA from four to three and the competitive constraint on the merged entity would be considerably compressed. Preliminary analysis of the Commission also indicated that the merged entity would have rich market shares for delivery services to some destinations leading to possible rivalry concerns. To determine preliminary concerns and fair probe of acquisition, project the commission has 90 working days until 8 December 2015.

According to FedEx, the deal is also being examined by other anti-trust organizations, including the Ministry of Commerce (MOFCOM) in China and Conselho Administrativo de Defesa Econômica (CADE) in Brazil. President of FedEx Express in Europe David Binks said FedEx, and TNT Express will work together according to the needs of the European Commission for additional due diligence and both services are assured that the fusion of companies will rise competition and produce benefits for customers.

FedEx is conscious about all the significant regulatory steps that would permit FedEx to complete its transactions around the world at the start of the 2016 and both teams are passionate about customer service. TNT said the fusion of both services will bring success and improvement in service. TNT will continue to work together with FedEx and European Commission with a view to a positive result. During the transaction approval procedure the chief focus of the company will on the performing its Outlook change and improvement policy.

 

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