Imagine a package crossing the Atlantic that previously required multiple logistics networks for delivery could soon be handled through a single, seamless connection. This scenario is becoming reality as FedEx's $4.8 billion acquisition of TNT Express moves closer to completion after receiving a crucial non-objection statement from the European Commission.
The joint announcement from FedEx and TNT Express confirmed that the European Union's deadline for filing objections (October 23) has passed without any formal opposition. Both companies anticipate finalizing the acquisition in the first half of 2016.
Regulatory Concerns Addressed
This development contrasts sharply with earlier concerns from EU regulators. In late July, the European Commission launched an investigation to assess whether the merger complied with EU competition rules. Initial worries centered on potential insufficient competition in Europe's international express and deferred small package delivery markets, which might lead to price increases harming businesses and consumers.
The Wall Street Journal reported on October 1 that European regulators had considered requiring FedEx to make concessions, such as selling certain assets. Such requirements could have complicated the deal, as TNT's only realistic European buyers would have been competitors UPS and DHL.
This isn't TNT's first experience as a takeover target. In 2012, UPS attempted a $6.8 billion acquisition that ultimately failed due to formal rejection by EU regulators, primarily over competition concerns in Europe's parcel market.
Strategic Benefits of the Merger
FedEx officials recently emphasized that combining with TNT Express presents a highly competitive opportunity for small package delivery services within and beyond Europe. The companies' networks are largely complementary—FedEx excels in U.S. domestic and non-European international services, while TNT focuses on intra-European operations.
The merged entity will also gain enhanced e-commerce capabilities, benefiting consumers and small-to-medium businesses across Europe and beyond.
To safeguard the transaction, FedEx agreed to pay TNT a $200 million breakup fee if the deal collapses. The combined company's European headquarters will be located in Amsterdam/Hoofddorp, with TNT's Liege hub remaining a key operational center.
Market Impact and Competitive Landscape
TNT has grown into a respected €6.68 billion company with diversified revenue streams across 200+ countries. Its substantial assets include aircraft, vehicles, hubs and warehouses, handling approximately one million parcels daily with nearly 80,000 employees.
Industry analysts view the acquisition positively. "This benefits TNT, which had financial volatility issues, while strengthening FedEx and helping EU shippers," said Rob Martinez, President and CEO of Shipware LLC. "We believe this actually makes the market more competitive."
Martinez noted that the acquisition strategically expands FedEx's European capabilities, distribution footprint and market share. While FedEx already operates significant European air operations, TNT provides a comprehensive ground network—particularly in France and Britain where FedEx lacks strong road infrastructure.
The combined entity will immediately become Europe's second-largest operator with 17% market share, behind DHL's estimated 19% but ahead of UPS's 16%. Unlike UPS's failed 2012 attempt, regulatory opposition appears less likely as FedEx currently holds less than 5% of the European market.