United Parcel Service “UPS" will pay $6.85 billion for Dutch peer TNT Express in a deal that makes the world's largest package delivery company, as the market leader in Europe. UPS will also get access to TNT's stronger networks in the fast-growing Asian and Latin American markets, bringing the U.S. Company's global sales up to over 45 billion Euros. The deal has raised concerns that smaller companies will find it harder to compete, as Germany's Deutsche Post DHL, the closest rival in Europe, said the European Commission should examine the proposed takeover thoroughly. TNT said on Monday its executive and supervisory boards unanimously supported UPS's offer of 9.50 Euros per share, a premium of nearly 54%, up from an initial 9 Euros per share last month. TNT's biggest shareholder PostNL, which owns 29.8%, also said it backed the offer, which UPS said it would finance through a combination of $3 billion in available cash and new debt. Marie-Christine Lombard - TNT Express head- said "It's a difficult day and a great day. Difficult because TNT is a proud company and it is difficult to agree to be acquired", and she addd "It's a great day because the combination of the two companies...will be enhanced and really deliver the global leader that will be unequalled." By the declaration of the deal, TNT Express shares rose 1.5% to reach 9.48 Euros. The offer ends years of speculation about the future of the Dutch delivery company, which was split from the Dutch mail company PostNL and listed last year. UPS has long looked at TNT as a way to help it expand in Europe, especially Britain, France and Germany, as it said it was confident the European antitrust watchdog would clear the offer without going into a prolonged investigation. UPS said the acquisition will accelerate its global growth strategy by increasing foreign revenue from 26 percent to 36 percent of the group total. UPS also added that the $6.77 billion acquisition will be financed with an equal mix of cash and banking borrowings and would enhance its earnings per share in the first year after the deal.
