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FedEx Will Acquire TNT Express

Image via Flickr by BriYYZ

TNT Express is a global logistics company that operates in Europe, the Middle East, Latin America, and Asia Pacific. They serve more than 200 countries and have a value of $6.680 billion euro. They handle nearly one million deliveries per day. However, the company has been struggling to compete with UPS, FedEX, and DHL. In 2012, UPS attempted to buy the TNT Express, but were unsuccessful. Now, FedEx is trying to make a deal happen. If everything goes smoothly, FedEx will get TNT Express at a discount compared to the UPS offer.

FedEx plans to draw on the expertise of TNT Express to make FedEx an even stronger competitor in the transportation and logistics industry. Chairman and CEO of FedEx, Frederick W. Smith, said, “We believe that this strategic acquisition will add significant value for FedEx shareowners, 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 e-commerce — and positions FedEx for greater long-term profitable growth.”

Historically, Europe has been a hard market for foreign entities to get into. That’s why this acquisition is such a smart move for FedEx. TNT Express has a strong hold of customers in Europe. FedEx sees the acquisition of TNT Express the perfect opportunity to expand their reach globally. Right now FedEx focuses primarily in North American and Asia. They can capitalize on the fast growing delivery market in Europe and continue to expand as a strong competitor.

One condition of the acquisition is that TNT Express’ airline operations must be divested. There are lots of other stipulations that FedEx must work out before the acquisition is allowed. If FedEx is successful, they will be in a better position than their competitors UPS and DHL.

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