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 Though TNT will receive a
euro200 million ($265.5 million) break fee, it faces an uncertain future on its own. The drop in share price wiped off nearly
euro2 billion from its market value. At one point, the shares had plunged by 50 percent before recovering somewhat to be trading 42 percent lower at
euro4.762.
UPS had offered in March to buy TNT, Europe's second-largest delivery company, to better compete with Europe's largest, Deutsche Post's DHL. But regulators said in October that the deal would hurt competition by reducing the number of companies in the sector.
In response, UPS offered to sell parts of the company's small package operations and airline assets. But after meeting with regulators Jan. 11, UPS told TNT it saw no prospect of the deal being approved
-- and it wasn't interested in further concessions.
In its last earnings report, for the third quarter of 2012, TNT lost euro3 million on sales of
euro1.8 billion. Former CEO Marie-Christine Lombard quit in September
-- mid-takeover -- in a move that was criticized as "unethical" by TNT's chairman, Antony Bergmans, and suggested the deal was in trouble, since she stood to gain a
euro2.6 million bonus for seeing it through to completion.
She was replaced on an interim basis by CFO Bernard Bot.
In a statement, TNT conceded that the "protracted merger process has been a distraction for management" and that it would now focus on reassuring customers, encouraging employees and making money.
"Management will provide an update on its strategy in due course," the company said.
UPS CEO Scott Davis said he was "extremely disappointed" with the stance taken by regulators on what would have been his company's largest-ever acquisition.
"We proposed significant and tangible remedies designed to address the European Commission's concerns with the transaction," he said, adding that the deal would have benefited customers worldwide and supported economic growth "particularly in Europe."
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 The European Commission, which would not comment, must publish its review of the deal by Feb. 5.
The Commission reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market. It has the power to block deals or to demand concessions, such as the sale of business parts, to safeguard market balance.
Before UPS's bid for TNT Express, some analysts thought rival FedEx Corp. might make an offer for the company, but FedEx executives said in March they had no plans to do so.
SNS Securities analyst Geert Steens said European regulators have signaled they would not view a takeover by FedEx or
-- less likely_ DPD, a unit of France's La Poste, as problematic. But there is little guarantee either will bid for TNT in the current climate.
Steens said TNT is worth around euro4 per share as an independent company, and some observers thought UPS was overpaying at
euro9.50. TNT's largest shareholder
-- the former Dutch national mail company PostNL -- will likely keep angling for a takeover as it needs to cut its debt.
Shares of PostNL fell 34 percent to euro1.88.
TNT's assets in Asia and Latin America are part of the reason for its attractiveness as a takeover target, but the company's Brazilian operations ran into severe problems in 2010-2011 and were still loss-making in the third quarter of 2012.
[Associated
Press; By TOBY STERLING]
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
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