In a transaction which FedEx claims will transform its capabilities and accelerate global growth , existing employment terms of TNT Express will be respected and the combined European regional headquarters will be in Amsterdam.
Going forward, the airline operations of TNT Express will be divested because of airline ownership regulations. The purchase price is said to represent a premium of 33 per cent over the closing price of TNT Express on 2 April.
Explaining the motivation for the acquisition, FedEx CEO and chairman Frederick Smith said: We believe that this strategic acquisition will add signifiant value for FedEx share owners, team members and customers around the globe.
This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends especially the continuing growth of global ecommerce and positions FedEx for greater long-term profitable growth.
According to a statement, FedEx intends to finance the deal by using available cash rescues and both existing and new debt arrangements. The business has a reported market capitalisation of $47bn.
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FedExs three most recent M&A transactions have seen the business buy companies in Africa and the US. Its last purchase, made earlier in 2015, involved GENCO, reportedly the largest third-party logistics provider in North America.
Commenting on how the new deal will benefit TNT Express, CEO Tex Gunning said: This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedExs proposal, both from a financial and a non-financial view, is good news for all stakeholders.
Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run.
FedExs European push comes two years after United Parcel Service (UPS) pulled out of a 5.2bn bid for Dutch firm TNT Express.
The deal, set to go before competition regulators, is expected to be completed in the first half of 2016 after which the TNT Express branding will be kept for an appropriate period .