UPS in Talks With TNT Over $15 Billion Takeover

[rotor&wing]

UPS in Talks With TNT Over $15 Billion Takeover, Telegraph Says
By Martijn van der Starre
Aug. 10 (Bloomberg) -- United Parcel Service Inc., the world's largest package-delivery company, held initial talks to buy TNT NV for 10 billion euros ($15 billion), the Sunday Telegraph said, citing unidentified people.
Soaring fuel costs have hurt global courier businesses hard and falling share prices have made consolidation more compelling, the London-based newspaper said.
``It's our policy not to comment on such market rumors,'' Pieter Schaffels, a spokesman for Hoofddorp, Netherlands-based TNT, said when contacted by Bloomberg News.
Buying Europe's second-biggest express-delivery service would give UPS, based in Atlanta, a full European air and road- delivery network, including an air hub in Liege, Belgium, and a trucking center in the Dutch city of Arnhem. TNT's revenue in 2007 totaled 11 billion euros.
``The rationale is very logical,'' Corne van Zeijl, a senior portfolio manager at SNS Asset Management in Den Bosch, the Netherlands, who oversees about 800 million euros and owns TNT shares. The revenue gains and cost savings from a possible takeover of TNT by UPS ``will be rather big.''
UPS is being advised by Morgan Stanley and may plan to sell TNT's postal division to a private-equity buyer, or team up with a buyout firm for the acquisition, the Sunday Telegraph said. TNT is being advised by Goldman, Sachs & Co., the newspaper said.
TNT rose 59 cents, or 2.4 percent, to 25.36 euros in Amsterdam on Aug. 8. The shares have dropped 10 percent this year, valuing the company at 9.34 billion euros. UPS added $2.44, or 3.9 percent, to $65.70 in New York. Its stock has dropped 7.1 percent in 2008, valuing the carrier at $67.3 billion.
No Comment
TNT surged 26 percent on July 14 after the Financial Times reported it was in preliminary talks with U.S. competitor FedEx Corp. It fell 16 percent, the most in 10 years of Amsterdam trading, on July 24 after the Wall Street Journal said the talks didn't lead to Memphis, Tennessee-based FedEx making an offer.
UPS has considered buying TNT in the past, the Journal said at the time. TNT and FedEx declined to comment on the reports.
UPS agreed in May to take over Deutsche Post AG's U.S. air shipments to help cut costs and restore Germany's biggest postal service's DHL Express U.S. unit to profitability. UPS estimated the 10-year deal with Bonn-based Deutsche Post would boost annual revenue by as much as $1 billion.
TNT, the Netherlands' biggest letter-delivery service, said July 28 second-quarter net income dropped 16 percent to 205 million euros, short of analyst estimates, and said 2008 sales and margins will be at the low end of forecasts. Revenue rose 4.5 percent to 2.81 billion euros in the quarter.
To contact the reporter on this story: Martijn van der Starre in Amsterdam at [email protected]
Last Updated: August 10, 2008 09:54 EDT

 

[flyinboxes]

Spending the DHL money already? The deal must be done.

 

[shooter]

Oh, now this air network integration is reeeaalllly going to be interesting. :laugh:

But remember, you are not entitled to employment even overseas.

 

[rotor&wing]

This will give UPS an air network in Europe, a much more economical alternative by using TNT designated aircraft and crews.

 

[Airbus300]

This will give UPS an air network in Europe, a much more economical alternative by using TNT designated aircraft and crews.

For those of us that do not know, who flies for TNT (Pilot group and how many airplanes)? Routes too, if you have it handy.

 

[Airbus300]

(Old article)

TNT flies higher under new pilot

Europe Business Review, July-Sept, 1998

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TNT, the Dutch multi-national fast-freight company with Australian origins, is planning to travel faster.
The company's new purpose-built express freight centre at Liege, Belgium, is the most advanced of its kind in Europe and designed to meet the rapid growth of express freight in Europe's single currency economies.
The A$90 million centre at Liege handles all TNT consignments within Europe and provides connections to the rest of the world. This means that through TNT, shippers now have access to the whole of Europe via a single central handling point. It can now handle 1000 tonnes of freight each night, a capacity that can be expanded by modular additions.
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The opening of the centre also launched a new corporate identity in which diverse services are provided under the familiar TNT brand name.
TNT, founded in Australia, and KPN, its Dutch owner, are an odd couple - but in 1996 they arranged a "dream" marriage.
At that time KPN, which runs the Dutch post and phone system under Royal warrant (and has a prince on its Board), was rich, but little known elsewhere. And it wanted to go global.
TNT had grown from one suburban truck in 1946 to a worldwide brand name and European leader in express freight - but by 1996 it lacked money to grow further. Hence TNT welcomed the A$2 billion takeover by KPN.
The friendly takeover followed six months of discussions of the benefits to be gained from combining TNT with PTT Post (KPN's postal and logistics subsidiary) and their shared interests in GD Express Worldwide.
The takeover created a new global leader in the fast-growing, time-sensitive distribution and logistics industries, ranking in the world's top four in the business of "total supply chain management".
The strategy and rationale is to create an integrated worldwide network by combining the operations and expertise of both companies, and to capitalise on the customer franchises and strong international image of TNT.
TNT, a global service, was better known internationally than KPN, a national company with overseas interests.
In 1992, PTT Post and TNT had begun close commercial links through their joint interest in GD Express which traded under the brand name TNT Express Worldwide. The Swedish Post Office has an indirect minority interest in GD Express.
The takeover combined the operations of:
* TNT's distribution and logistics businesses in the four largest Western European countries (Italy, Germany, UK and France), the Americas, Australia and Asia;
* PTT Post's distribution and logistics services in Holland, Germany, Belgium, Austria and Denmark, as well as its international mail service; and
* TNT and PTT Post's international services through GD Express.
TNT is now Europe's market leader in global express distribution, logistics and international mail. TNT incorporates the activities of former brands TNT Express Worldwide, TNT Ltd., Mailfast, InterPost, Caxton, PPIC, and TNT Logistics.
TNT is a subsidiary of TNT Post Group (TPG), which is listed on the Amsterdam and New York stock exchanges.
Headquartered in Amsterdam, the Group employs 100,000 people in 150 countries, carries 134 million freight and mail items a week and had revenues of A$18 billion in 1997.
A new agreement with the cargo division of KLM, Royal Dutch Airlines, is part of the TNT strategy for the new Europe.
The deal strengthens TNT's market position and its service to customers. It follows similar agreements with Qantas and South African Airways.
Under the agreement KLM will provide TNT with guaranteed cargo space on its aircraft five times a week, initially on flights from Amsterdam to Dubai and later on other routes.
TNT also recently launched "MedPak", a service for the fast, safe distribution of medical samples in Europe. Pharmaceutical companies developing new drugs are now using laboratories continents apart to perform the clinical trials necessary before new pharmaceutical products can be approved.
Test samples, given by volunteer patients and sent by doctors to these laboratories, have only a 48-hour life span and thus need guarantees of fast delivery. The service will extend to Asia and the Middle East later this year.
From the Express Centre at Liege, TNT's European air network will increase its connections to five airports (Seville, Hannover, Frankfurt, Bologna and Nantes) and will start to operate its own aircraft to Oporto, Istanbul, Toulouse and Marseilles.
Liege is in the middle of the air-cargo triangle of Amsterdam, Paris and Frankfurt, with two-thirds of the European cargo market within four hours by road.
Over the next four years, TNT will purchase or lease 14 Airbus A300B4 freighters to gradually replace ten B727200 aircraft, currently on lease. This will increase the capacity of TNT's fleet by 50 percent within the next few years.
The extra capacity is necessary to accommodate TNT's anticipated annual growth of 15-20 percent.
The A300B4 has economic and environmental advantages over the 727. The new aircraft has twice the cargo capacity and operates within the latest noise regulations.

 

[Airbus300]

Off the TNT website:

Facts and figures

• TNT Express is the only international integrator to operate a direct service from Europe to China.
• TNT Express is the only company that is globally recognised as an Investor in People.
• TNT Express is the only major express delivery company that does not impose consignment size or weight limits.
• TNT Express handles up to 80 aircraft landing and departures per night at its European Air Express Hub in Liège, Belgium from 67 airports across Europe.
• TNT Express trucks and vans drive over 1,900,000km per week in Europe.
• The total length of the conveyor belts at the Liège air hub is 6.5km.
• TNT Express in Italy has been ranked number 10 out of 800 companies that participated in a survey by the Great Place to Work Institute (GPTW). The survey is conducted by analysing the level of satisfaction of a company’s employees.
• Business volumes for TNT Express in the Gulf have increased fourfold over the past three years and the company now commands a market share of 18% compared with 16% in 2001.
• TNT Argentina has introduced a ‘social welfare’ programme where each employee has five working days per year to work for a non-profit organisation.
• Founded at the end of 1995, TNT Express is the youngest express carrier in Bulgaria but has the fastest revenue growth - 30 % per year.
• TNT Express in Russia has the widest coverage of the Russian territory of any delivery company, servicing over 5,500 cities and 11 time zones.

 

[PreContact]

This will give UPS an air network in Europe, a much more economical alternative by using TNT designated aircraft and crews.

You have to check out our scope clause on this..

 

[rotor&wing]

You have to check out our scope clause on this..

Oh yea.....an "ironclad scope clause" I'm sure.

But what happens if UPS operates TNT as a subsidiary? Also, how does UPS circumvent EU regulations concerning air transport within the EU with US registered aircraft being operated with US crews?

Like someone else said earlier on another cargo forum here, it's just business.

 

[TWA]

You have to check out our scope clause on this..

:smash: :smash: :smash: Never heard that one before...We all know that scope ALWAYS holds up in court!

Sorry UPS guys, don't mean any ill will, but this is going to be one hell of a fight for you.