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European Commission

Press release

Brussels, 20 July 2012

Mergers: Commission opens in-depth investigation into proposed acquisition of TNT Express by UPS

The European Commission has opened an in-depth investigation under the EU Merger Regulation into the proposed acquisition of TNT Express of the Netherlands by the American company United Parcel Service (UPS), both major players in the small package delivery sector. The Commission's preliminary investigation indicated potential competition concerns in the markets for small parcel delivery services, in particular international express services, in numerous Member States, where the parties would have very high combined market shares. The opening of an in-depth inquiry does not prejudge the result of the investigation. The Commission now has 90 working days, until 28 November 2012, to take a decision on whether the proposed transaction would significantly impede effective competition in the European Economic Area (EEA).

Commission Vice President in charge of competition policy Joaquín Almunia said: The small package delivery sector is of strategic importance for various other industries in Europe. The proposed acquisition could in particular reduce competition for the provision of the fastest express delivery services, to the detriment of direct customers and ultimately of European consumers. The Commission needs to make sure that customers continue to have access to these services at competitive conditions."

UPS and TNT Express are two out of the only four so-called "integrators" currently operating in Europe. Integrators are companies that control a comprehensive air and road small package delivery network throughout Europe and beyond and are capable of offering the broadest portfolio of such services. The other integrators present in Europe are DHL, which is owned by Deutsche Post, and FedEx, a US-based company.

The Commission’s initial investigation has shown that small package delivery services form a highly differentiated market which can be divided into several segments, depending notably on the committed delivery timeframe associated to the services. It appears that other integrators would be the only significant competitive constraint on the merged entity for most express services, especially for the fastest time-commitment deliveries. As the proposed transaction would reduce the number of integrators competing in the EEA from four to three, the competitive constraint on the merged entity would be significantly reduced. This would lead in many Member States to a highly concentrated market for domestic and, even more so, international express delivery services.

The Commission will now investigate the proposed merger in-depth to determine whether these initial concerns are confirmed or not.

The transaction was notified to the Commission on 15 June 2012.

Companies and products

UPS is a US-based global provider of specialised transport and logistics services. It is active in small package delivery services, air cargo, freight forwarding and contract logistics.

TNT Express is based in the Netherlands and is active in the global logistics sector, where it provides small package delivery services, air and ground freight, freight forwarding and contract logistics.

Both UPS and TNT Express are major players in the provision of small package delivery and qualify as "integrators", that is small package delivery companies that own an extensive air and ground small package delivery network throughout Europe and beyond.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The Commission clears the vast majority of mergers after a one-month review, but if it has competition concerns it must open an in-depth investigation (Phase II review). The opening of a full probe does not prejudge its outcome.

The Commission is currently conducting five other phase II merger investigations. The first one is about the proposed acquisition of Goodrich by United Technology in the aviation equipment sector (see IP/12/308), with a deadline for a final decision on 31 August. The second one is about the proposed acquisition of the recorded music business of EMI by Universal Music Group (see IP/12/311), with a deadline for a final decision on 6 September. A third investigation concerns the proposed creation of a joint venture in the UK between Vodafone, Telefónica and Everything Everywhere in the field of mobile commerce (see IP/12/367). The deadline here is 19 September. The fourth on-going phase II investigation examines the proposed acquisition of Inoxum, the stainless steel division of ThyssenKrupp of Germany by the Finnish stainless steel company Outokumpu (see IP/12/495). The Commission has until 24 October to reach a final decision. The last phase II relates to the proposed take-over of Orange Austria by Hutchison 3G in the market for mobile telephony services in Austria (see IP/12/726), with a deadline until 6 November 2012.

More information on the case will be available at:

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

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