United Parcel Service (UPS), the world's leader in express deliveries, seems to have failed to convince its American competitor FedEx to take over part of the assets of the Dutch firm TNT Express, with which it has been working on a merger deal since last March. According to The Financial Times of 8 January, their informal talks are believed to have foundered because FedEx refuses to enter into firm discussions unless the offer concerns a larger share of TNT's activities. For now, TNT subsidiaries in 16 EU member states, including Spain and Portugal, are concerned. Analysts interpret FedEx's refusal as its way of preventing the merger between UPS and the number two in small parcel delivery in Europe, worth an estimated 5.16 billion.

This development does not bode well for the European Commission's verdict on the deal, due in February. On 20 July 2012, the EU executive opened an in-depth investigation into the UPS takeover bid on TNT (see Europolitics 4471) due to its concerns over competition problems for international express services, where the parties would have a very large combined market share. It suspects that this excessive concentration would be detrimental to direct customers and ultimately to European consumers. For the Commission, the market in question is made up of only four firms that control a global air and ground network for small parcel delivery in Europe and beyond: UPS, TNT, DHL and FedEx. A merger by two of these companies could stifle competition by cutting the number of players...

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