EU Probes FedEx, TNT Deal -- Update

By Gabriele Steinhauser 

BRUSSELS--The European Commission on Friday opened an in-depth investigation into FedEx Corp.'s EUR4.4 billion ($4.8 billion) deal to buy TNT Express NV, saying it was concerned about the merged company's dominance in the international delivery of small packages in some European markets.

The commission, the European Union's antitrust watchdog, said the two remaining international delivery companies, United Parcel Service Inc. and DHL Worldwide Express Inc., may not provide sufficient competition to the merged company.

"This could lead to higher prices for business customers and consumers," the commission said. The two companies announced the deal in April.

The commission now has until Dec. 8 to investigate the proposed acquisition and to decide whether to approve the deal or ask the companies for concessions to ease its concerns. If it fails to reach an agreement on how to bring the acquisition in line with EU competition rules, the commission can also decide to block the merger.

In 2013, the commission quashed an attempt by UPS to buy TNT for around $7 billion.

EU Competition Commissioner Margrethe Vestager said affordable and reliable delivery of small packages was important for consumers and many businesses, especially for online shopping. "The commission must therefore make sure that FedEx's takeover of TNT would not impede effective competition and would not lead to higher prices for consumers, " she said.

Write to Gabriele Steinhauser at [e-mail]

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