United Postal Service intends to buy up TNT NV, Europe's number two express delivery service. The deal is estimated at roughly €20 million, although the companies have not made any public statements.
The potential acquisition is the latest of a serious of rumors that UPS, or its American competitor FedEx, is seeking to buy out the Amsterdam-based company. FedEx was reported to have secured the deal as recent as July.
If successful, UPS's share of the European market will surge from 10 to 25 percent. This would make it Europe's number one package handler, followed by the Germany-based DHL at 22 percent and FedEx at five percent. The deal represents UPS gaining an even larger lead in the world market, and reducing the number of its serious competitors from three to just two.
Although the European deal is unlikely to result in significant anti-trust concerns, UPS is currently in talks with DHL over delivery in the United States. DHL is interested in outsourcing its American air cargo delivery to UPS, potentially making the German company a $1 billion annual customer of its rival. This would reduce market competition and anti-trust concerns may be raised, particularly if UPS also gains dominance among European and transatlantic infrastructure.
The UPS-DHL deal is believed to be for a ten-year term, and to represent DHL's best prospect to return to profitability.
The acquisition of TNT NV would prove to be UPS's largest take-over to date. TNT operates in more than 200 countries, employs nearly 160,000 workers, and brought in revenues of €11 million in 2007. TNT NV's express delivery services are perhaps the most efficient in Europe, and has a track record of rising profits despite worldwide economic downturns.
Industry experts believe that FedEx has more to gain by a buy-out of TNT NV, as it would make provide it with much-needed market share in relation to its competitors in the European market, but that UPS can make a more lucrative offer to TNT NV shareholders.
UPS seeks to gain TNT NV's full complement of and air road delivery system with the acquisition, which experts believe is the most efficient of the continent's networks. This is an especially attractive proposition, given rising fuel costs and UPS's relatively modest European ground infrastructure. However, there is overlap among the companies' services and physical holdings, and UPS stands to gain little by acquiring TNT NV's non-express operations.
TNT NV also has a substantial delivery network in China, where UPS is making significant investments.
The potential acquisition is the latest of a serious of rumors that UPS, or its American competitor FedEx, is seeking to buy out the Amsterdam-based company. FedEx was reported to have secured the deal as recent as July.
If successful, UPS's share of the European market will surge from 10 to 25 percent. This would make it Europe's number one package handler, followed by the Germany-based DHL at 22 percent and FedEx at five percent. The deal represents UPS gaining an even larger lead in the world market, and reducing the number of its serious competitors from three to just two.
Although the European deal is unlikely to result in significant anti-trust concerns, UPS is currently in talks with DHL over delivery in the United States. DHL is interested in outsourcing its American air cargo delivery to UPS, potentially making the German company a $1 billion annual customer of its rival. This would reduce market competition and anti-trust concerns may be raised, particularly if UPS also gains dominance among European and transatlantic infrastructure.
The UPS-DHL deal is believed to be for a ten-year term, and to represent DHL's best prospect to return to profitability.
The acquisition of TNT NV would prove to be UPS's largest take-over to date. TNT operates in more than 200 countries, employs nearly 160,000 workers, and brought in revenues of €11 million in 2007. TNT NV's express delivery services are perhaps the most efficient in Europe, and has a track record of rising profits despite worldwide economic downturns.
Industry experts believe that FedEx has more to gain by a buy-out of TNT NV, as it would make provide it with much-needed market share in relation to its competitors in the European market, but that UPS can make a more lucrative offer to TNT NV shareholders.
UPS seeks to gain TNT NV's full complement of and air road delivery system with the acquisition, which experts believe is the most efficient of the continent's networks. This is an especially attractive proposition, given rising fuel costs and UPS's relatively modest European ground infrastructure. However, there is overlap among the companies' services and physical holdings, and UPS stands to gain little by acquiring TNT NV's non-express operations.
TNT NV also has a substantial delivery network in China, where UPS is making significant investments.
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