Parcels merger deal falls through
The collapse of a takeover deal between delivery firms United Parcel Service (UPS) and TNT Express has provided a welcome boost to Royal Mail.
The deal would have been a blow to Royal Mail, which is growing its parcel deliveries business to make up for a continued shortfall in letters as it prepares for privatisation.
TNT has 70 delivery depots, three sorting hubs and three national contact centres in the UK and Ireland, where it employs some 11,000 staff.
While UPS is a major player in the United States, the firm's operations in the UK are smaller than TNT's. When the deal was agreed in March, it had 7,200 staff and a head office at Feltham, Middlesex.
UPS had offered to buy struggling TNT, Europe's second largest delivery company, to better compete with Europe's largest, Deutsche Post's DHL. UPS was also after TNT's assets in Asia and Latin America.
TNT will receive a 200 million euro (£166 million) break fee from UPS, but it faces an uncertain future, with shares plunging nearly 50% at one point in trading in Amsterdam on Monday.
Regulators said in October the deal, which would have been UPS' largest ever acquisition, would lead to over-concentration in the sector.
UPS offered to sell parts of the company's small package operations and airline assets but after meeting with regulators, UPS told TNT it saw no prospect of the deal being approved - and it was not interested in further concessions.
The European Commission, which reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market, will publish its review of the deal by February 5.