EU to probe FedEx takeover of Dutch rival TNT

Bloomberg adds that Patrick Fitzgerald, a spokesman for FedEx, said in a statement that FedEx and TNT will work to meet the Commission’s “need for additional due diligence”.

“This could lead to higher prices for business customers and consumers”, the commission said.

He also said that the merger of the two companies will benefit customers and increase competition.

Fedex and TNT Express said they were still on track to complete their proposed combination in the first half of 2016, despite the announcement of the European Commission’s in-depth review.

The European Commission in Brussels on Friday said the combined company may cut competition in the market for small packages, which could lead to higher prices. FedEx and TNT have previously expressed confidence they would win necessary regulatory clearances in Europe, China, Brazil and the United States, but have said the process could take up to a year. FedEx has also submitted a request for review and approval of its Offer Document with the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten, AFM) on June 26, 2015 as required under Dutch law.

The commission now has until December. 8 to investigate the proposed acquisition and to decide whether to approve the deal or ask the companies for concessions to ease its concerns. TNT Express went through extensive restructuring after the UPS bid failed, cutting 4,000 jobs. Investors had welcomed the news at the time and FedEx stock traded up by 2.69% on April 7, despite a 0.21% slump in the S&P500 Index – to which it trades at an adjusted beta of 1.02. FedEx employs more than 320,000 people world-wide with annual turnover of $47 billion.