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Commission may object to UPS-TNT merger

[ September 25, 2012   //   ]

The European Commission may send UPS and TNT a statement of objections to their proposed merger, reports the Europolitcs website. It said that this might force the US parcels giant into making concessions.

EU Competition Commissioner Joaquin Almunia, at a 20 September conference in the US said it was important to keep the price of international express parcels services down through strong competition, adding: “If we see reasons for adopting a statement of objections in the second phase, we will do so,”

though no such decision had yet been made, stressed the commissioner.

The EU has already opened an investigation into the €5.16 billion UPS bid for TNT. Europolitics says that the Commission and UPS disagree over the definition of the market in question, which is reminiscent of the failed NYSE Euronext and Deutsche Börse merger that stumbled over a similar disagreement.

The EU argues  that, with  only UPS, TNT, DHL and FedEx sharing this segment in the EU,  and, given FedEx’s small market share in Europe, DHL would be the only credible competitor to a marged UPS and TNT.

UPS however maintains that there are far more than three competitors in Europe, with some 13,000 registered courier companies and that the market is highly fragmented and very inefficient.

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