Warning: "continue" targeting switch is equivalent to "break". Did you mean to use "continue 2"? in /homepages/36/d539580011/htdocs/app539580914/wp-content/plugins/my-wp-translate/includes/class-my-wp-translate-po-parser.php on line 167 Mergers: Commission opens in-depth investigation into proposed acquisition of TNT by FedEx - European-Aviation.net
The European Commission has opened an in-depth investigation to assess whether the proposed acquisition of TNT Express by FedEx Corporation is in line with the EU Merger Regulation. Both companies are major global players in the small package delivery sector. The Commission has concerns that on a number of European markets for international express and regular (so-called ‘deferred’) small package deliveries, the merged entity would face insufficient competitive constraints from the only two remaining players (UPS and DHL). This could lead to higher prices for business customers and consumers. The Commission now has 90 working days, until 8 December 2015, to investigate the proposed acquisition and to determine whether these initial concerns are founded. The opening of an in-depth investigation does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, commented: “Many businesses, and in particular e-commerce, rely heavily on affordable and reliable small package delivery services, and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought. The Commission must therefore make sure that FedEx’s takeover of TNT would not impede effective competition and would not lead to higher prices for consumers.”
FedEx and TNT are two out of the only four so-called ‘integrators’ currently operating in Europe. ‘Integrators’ are companies that control a comprehensive air and road delivery network throughout Europe and beyond and are capable of offering a broad portfolio of small package delivery services. The other ‘integrators’ present in Europe are DHL, owned by Deutsche Post, and UPS, a US-based company.
The Commission’s initial investigation has shown that small package delivery services can be divided into several segments, depending notably on whether the destination is in the European Economic Area (EEA) or beyond and on whether the timing of the delivery is express or ‘deferred’.
The Commission’s preliminary investigation indicates that the other ‘integrators’ would be the only significant competitive constraint on the merged entity for most international express services, with a destination within or outside the EEA. 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, leading to a concentrated market in several Member States for international express delivery services to a destination within or outside the EEA.
FedEx and TNT also provide international ‘deferred’ services outside the EEA. The Commission’s initial market investigation showed that the merged entity would have very high market shares for services to some destinations leading to potential competition concerns.
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 26 June 2015.