Proving the Business Case for the Internet of Things

FedEx agrees to buy TNT Express for $8.4bn

Steve Rogerson
April 15, 2015
FedEx has agreed to buy Dutch company TNT Express for €4.4bm ($4.8bn) in an all-cash public offer as it tries to capitalise on the growth of e-commerce in Europe. The two companies reached a conditional agreement on the recommended all-cash public offer of €8 per ordinary TNT Express share.
The offer price represents a premium of 33% over the closing price of April 2, 2015, and a premium of 42% over the average volume weighted price per TNT Express share of €5.63 over the last three months.
The transaction has been unanimously recommended and supported by TNT Express’ executive board and supervisory board. The parties have agreed to certain non-financial covenants including that existing employment terms of TNT Express will be respected.
“We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe,” said Frederick Smith, chairman and CEO of FedEx. “This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”
The European regional headquarters of the combined companies will be in Amsterdam and Hoofddorp. The TNT Express hub in Liege will be maintained as a significant operation for the group going forward. TNT Express’ airline operations will be divested, in compliance with applicable airline ownership regulations.
FedEx and TNT Express anticipate that the offer will close in the first half of 2016. They are confident that anti-trust concerns, if any, can be addressed adequately in a timely fashion.
“This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy,” said Tex Gunning, CEO of TNT Express. “But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders. Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reapbenefits today that otherwise would only have been available in the longer run.”
The combined companies’ customers could enjoy access to a considerably enhanced, integrated global network. This network would benefit from the combined strength of TNT Express’ strong European road platform and Liege hub and FedEx’s strength in other regions globally, including North America and Asia. TNT Express customers would also benefit from access to the FedEx portfolio, including global air express, freight forwarding, contract logistics and surface transportation capabilities.
FedEx intends to finance the offer by using available cash resources and through existing and new debt arrangements. The proposed transaction will have no financing contingencies. FedEx has a market capitalisation of $47bn, solid investment grade credit rating and ample available liquidity.
PostNL, holder of approximately 14.7% of the outstanding shares of TNT Express, has committed to tender its shares under the offer, if and when made, and to vote in favour of the resolutions.
After completion of the offer, the TNT Express supervisory board will be composed of three new members selected by FedEx – David Binks, Mark Allen and David Cunningham, who will act as chairman – and of two members of the current supervisory board of TNT Express qualifying as independent within the meaning of the Dutch Corporate Governance Code, being Margot Scheltema and Shemaya Levy Chocron.
FedEx's financial advisor is JP Morgan Securities, and its legal advisors are NautaDutilh and Baker & McKenzie. On behalf of TNT Express, Goldman Sachs International and Lazard are acting as financial advisors and Allen & Overy (Amsterdam) is acting as legal advisor.