EU Court Scraps Decision to Block UPS-TNT Merger in 2013 on Procedural Missteps -- Update

By Natalia Drozdiak 

BRUSSELS--The European Union's second-highest court on Tuesday annulled a 2013 decision by the bloc's antitrust watchdog to block United Parcel Service Inc.'s $7 billion bid for Dutch parcel-delivery company TNT Express NV on the basis of procedural missteps by the regulator.

The general court of the EU said the European Commission had made "non-negligible changes" to the economic analyses previously discussed with UPS but didn't communicate its final econometric analysis model to the company before adopting its decision.

"By failing to do so, the commission infringed UPS' rights of defense," the court said in its statement.

"UPS is pleased to see that its reasoning was upheld by the European General Court," said Gregg Svingen, International Director for PR & Communications at UPS.

A European Commission spokeswoman said, "The commission takes note of the General Court's decision annulling the commission decision," and she added that the EC would carefully analyze the judgment and that it "fully recognizes the importance of giving parties the full rights of defense."

The commission can appeal the decision to the bloc's highest court, the Court of Justice.

The landscape has changed since the commission's 2013 decision and any renewed attempt at a merger between UPS and TNT looks unlikely.

After UPS called off its merger in mid-January 2013 following stiff objections to the deal from the EU, logistics rival FedEx Corp. stepped in to acquire TNT in May 2016 for EUR4.4 billion ($4.67 billion), expanding its reach in Europe.

The EU worried the overnight-parcel-delivery market would effectively become a duopoly between a combined UPS-TNT business and DHL, a unit of Deutsche Post AG. The regulator also worried that other parcel-delivery companies, including FedEx, could be shut out of the market.

The commission formally blocked the UPS-TNT deal at the end of January 2013.

It is unusual for the bloc's top courts to overturn decisions by the bloc's executive, the European Commission. However, in antitrust cases, the court generally overturns commission decisions primarily on the basis of procedural irregularities.

Write to Natalia Drozdiak at [e-mail]

(END) Dow Jones Newswires

March 07, 2017 08:10 ET (13:10 GMT)

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