By Foo Yun Chee
TRIER, Germany Oct 18 United Parcel Service Inc
will have to offer concessions to secure regulatory
approval for its 5.2 billion euro ($6.8 billion) bid for Dutch
peer TNT Express, the European Union's antitrust chief
said on Thursday.
The European Commission is examining the deal, the biggest
in UPS's 105-year history, which will reinforce it as the world
No. 1 package delivery company.
"We will send the statement of objections to UPS tomorrow,"
European Competition Commissioner Joaquin Almunia told Reuters
on the sidelines of a conference organised by the Academy of
European Law in Trier, Germany.
The statement of objections is the regulatory document
detailing the Commission's worries about the impact of the deal
on rivals and consumers. Reuters flagged the move last week.
"The objections need to be removed by remedies," he said.
Almunia declined to say what kind of concessions he was
looking for. The EU competition watchdog typically favours asset
sales, but can also consider licensing deals or concessions
opening up networks.
A source told Reuters last week that UPS had not yet offered
any concessions, preferring to wait until it receives the
statement of objections. In some takeover cases companies have
managed to overcome regulatory concerns without offering any
concessions, but these are rare.
The executive European Commission is worried that the merger
would leave only three big players, the other two being Deutsche
Post's DHL and U.S.-based FedEx.
UPS argues, however, that its competitors also include
national postal companies such as French mail group DPD and
Royal Mail's European express parcel service GLS, as
well as freight forwarders like Swiss companies Kuehne & Nagel