ATLANTA -- United Parcel Service Inc. will drop its plans to acquire Dutch peer and European market leader TNT Express, after being informed that the European Commission will likely block the deal.
Scott Davis, UPS chairman and chief executive officer, said Monday in a statement, "We are extremely disappointed with the EC's position. We proposed significant and tangible remedies designed to address the EC's concerns with the transaction. The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular."
The statement said that, "Upon prohibition by the EC, the Offer Condition relating to EU Competition Clearance will not be fulfilled and UPS will pay TNT a termination fee in the amount of EUR 200 million and will withdraw the Offer."
The U.K.'s The Guardian reported Monday UPS said it was unrealistic to hope that the European Commission would give clearance, after members said Friday they were likely to prohibit the deal.
UPS and TNT Express said in November that they had offered numerous concessions to the European Commission to help seal the deal. The remedies included "the sale of business activities and assets in combination with granting access to air capabilities."
UPS' Davis said Monday, "I would like to thank TNT Express for their shared vision of the value we would have created for our customers, shareholders, and employees, and for the significant efforts they made over the past year.
"Looking ahead, our company focus will be on the continued execution of our growth strategy. While we viewed the acquisition as a compelling growth platform, our financial strength allows UPS to capture future opportunities."
(Atlanta Business Chronicle)