United Parcel Service Inc. has dropped a $6.9 billion offer for Dutch company TNT Express NV after the European Commission suggested it would not approve the deal, the Financial Times reported.
The European regulator has only rejected 22 mergers and acquisitions deals since 1989, according to the Financial Times.
UPS, the world’s biggest package-delivery company, had hoped that acquiring Europe’s second-largest express delivery service would help it compete better with European market leader DHL, owned by Deutsche Post AG, Bloomberg Businessweek reported.
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UPS attempted to alleviate antitrust concerns by offering to sell assets and air-network access to rivals, Bloomberg Businessweek reported.
But, the Financial Times noted:
Europe’s antitrust regulator believed the takeover would have left many European markets with only two “integrators” – companies that combine air and road delivery capacities – leaving customers with too little choice.
The EC is expected to formally block the deal by Feb. 5, Bloomberg Businessweek reported.
UPS Chief Executive Officer Scott Davis said he was “extremely disappointed” by the deal’s collapse, Bloomberg Businessweek reported. It would have been the biggest takeover in UPS history.
UPS will pay TNT Express 200 million euro fee for withdrawing their offer, the Financial Times reported.
Shares of TNT Express fell 51 percent in Amsterdam on news of the deal’s collapse, Bloomberg Businessweek reported.