European Regulators Won’t Block FedEx-TNT Linkup

FedEx Corp. and TNT Express N.V. announced that European regulators won’t object to the companies’ $4.9 billion acquisition plan, a decision that removes a barrier to their deal.

The European Commission decided not to block the deal, unlike its ruling two years ago, when regulators cited a reduction in competition as their reason for preventing UPS Inc. from buying the Dutch package and freight operator. FedEx and TNT have maintained since the April acquisition announcement that their transaction will increase competition.

“FedEx and TNT have been informed by the European Commission that no Statement of Objections will be issued,” the companies’ joint statement said. “FedEx and TNT continue to expect that the offer will close in the first half of calendar year 2016.”

“This seems to assure that the merger will proceed as scheduled,” said a report from Scott Group, an analyst at Wolfe Research.

FedEx and TNT trail UPS and market leader DHL Express in the European package market.

Some press reports had suggested UPS was lobbying to defeat the FedEx acquisition. UPS in its own statement said it wanted European regulators to hold FedEx to the same standards used when UPS’ purchase was being considered.

Other regulators, in China and Brazil, have to rule on the transaction.

In addition, FedEx announced it would raise $1.25 billion in debt markets. Wolfe’s Group said he anticipated the funds would be used to repurchase shares.

UPS is No. 1 and FedEx is No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.