EU to object to UPS bid for TNT: source
AMSTERDAM/BRUSSELS (Reuters) - EU antitrust regulators will next week tell United Parcel Service Inc (UPS.N) that its bid for TNT Express (TNTE.AS) is anti-competitive, a person close to the matter said on Wednesday, ratcheting up pressure on the U.S. company to offer concessions.
The European Commission, which is now examining the 5.2-billion-euro ($257.92 million) deal, will set out its concerns at a meeting with UPS officials before sending a statement of objections or charge sheet, the person said.
The person said UPS has not offered any concessions to date, preferring to wait until the EU watchdog details its concerns.
Shares in Dutch delivery group TNT Express (TNTE.AS) were down 0.8 percent to 8 euros by 5 a.m. EDT after falling as much as 2.5 percent in early trade. The Financial Times newspaper had on Wednesday reported that the EU watchdog would object to the deal.
TNT Express shares have been trading below 9 euros since the end of July versus UPS's bid of 9.50 euros per share.
UPS may find it difficult to come up with concessions to sooth regulatory concerns about the deal, the biggest in its 105-year history, said Andre Mulder, analyst with brokerage Kepler.
"We think the likelihood of the takeover being canceled has increased a bit further," he wrote in a note.
The Commission is worried that the proposed merger will reduce the number of players, leaving the combined entity to compete with only Deutsche Post's DHL (DPWGn.DE) and U.S. peer FedEx (FDX.N).
UPS is arguing that it faces competition from national postal companies such as French mail company DPD and Royal Mail's GBPO.UL European express parcel service GLS, as well as freight forwarders like Swiss companies Kuehne & Nagel (KNIN.VX) and Panalpina (PWTN.S).
(Reporting by Gilbert Kreijger and Foo Yun Chee; Editing by Alison Birrane and Hans-Juergen Peters)