United Parcel Service today offered to sell some European assets and grant competitors access to its air freight network in a bid to secure the European Union’s approval for its planned $6.8 billion takeover of its Dutch rival TNT Express.
“The proposed remedies aim to address the EC’s concerns regarding the competitive effects of the intended merger on the international express small package market in Europe,” the companies said in a joint statement.
“The discussions [with the EC] are ongoing, which means that the offered remedies may be subject to change.”
The companies didn’t say which assets would be divested or name any potential customers of their air and trucking networks.
“Eligible buyers of these activities will have to ensure the long-term viability of the divested activities and continuity of customer service,” the companies said.
The submission of remedies has extended the deadline for the EC’s investigation to February 5.
European competition commissioner Joaquin Almunia has said the UPS bid, announced on March 19, requires “substantial remedies” to win anti-trust clearance.
The EC is worried that the takeover of TNT Express, currently European market leader, would leave only two other major players — Deutsche Post’s DHL Express and FedEx.
But UPS, which would double its European “footprint” if the takeover goes ahead, has claimed that as well as FedEx and DHL Express, it is also competing against GLS, the express arm of the UK’s Royal Mail, French express carrier DPD, and logistics groups such as Switzerland’s Kuehne+Nagel and Panalpina.
UPS is reported to have spoken to FedEx, DPD and Royal Mail over the sale of assets and opening of its air network.
TNT last month agreed to sell its airline operations to Dublin-based ASL Aviation Group to comply with EU rules forbidding non-EU companies from acquiring control of EU airlines. The sale is conditional on the UPS takeover going through.