Two of the biggest transportation and logistics companies, FedEx and TNT Express, are set to merge with the signing of a conditional agreement for FedEx to purchase TNT Express for approximately €4.4bn ($4.8bn).
The conditional agreement involves an all-cash offer of €8 per share for all issued and outstanding ordinary shares in TNT Express, including shares represented by American Depositary Receipts.
The Offer Price represents a premium of 33% over the closing price of 2 April 2015 and a premium of 42% over the average volume weighted price per TNT Express Share of €5.63 ($6.14) over the past three calendar months.
FedEx, which has a market capitalization of $47bn, intends to finance the Offer by utilising available cash resources and through existing and new debt arrangements. The proposed transaction will have no financing contingencies.
“We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe,” said Frederick W. Smith, Chairman and CEO of FedEx.
PostNL, holder of approximately 14.7% of the outstanding Shares of TNT Express, has committed to tender its shares under the Offer, if and when made, and to vote in favour of the resolutions proposed at the EGM.
After successful completion of the Offer, the TNT Express Supervisory Board will be composed of three new members selected by FedEx (being David Binks, Mark Allen and David Cunningham who will act as chairman) and of two members of the current Supervisory Board of TNT Express qualifying as independent within the meaning of the Dutch Corporate Governance Code, being Margot Scheltema and Shemaya Levy Chocron.
Tex Gunning, CEO of TNT Express, said: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders.”
This recent offer comes just two years after EU regulators blocked a similar takeover offer of TNT by UPS. It is as yet unclear if FedEx has done enough to push its deal past Europe’s stringent antitrust laws.