The acquisition of TNT by UPS will see the company leapfrog DHL to become the biggest express parcels company in Europe, according to market estimates contained in International Express Parcels 2012, the latest report from industry expert research company Transport Intelligence.
The combination of UPS and TNT will significantly change the market landscape, providing the US integrator with ground networks in Europe, Asia and Latin America. In Europe, it will leave FedEx trailing significantly in a distant third place, although the Memphis-based carrier is still dominant in the US and bigger than the UPS/TNT tie up in Asia.
The acquisition's most significant impact will be in Europe where competition regulators are bound to take an interest. In several key country markets, UPS/TNT will become the single largest player, breaking through the significant 25% market share level; which always flags up an acquisition to the authorities. Despite this, Ti believes that following the acquisition, UPS will only have to make limited disposals, if any, as within individual market segments there is still a high degree of fragmentation.
According to John Manners-Bell, Ti's CEO, the deal has been struck at a good time for UPS. "TNT became vulnerable to takeover as a result of the challenging market environment and internal operational and managerial difficulties. This has allowed UPS to opportunistically buy at the bottom of this particular cycle. Our market forecasts predict that the express market will grow strongly in the coming years buoyed by economic growth, international trade and e-commerce. UPS now has an even better platform to exploit these trends."
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Content provided in partnership with Transport Intelligence.
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