BRUSSELS (Reuters) - United Parcel Service Inc (UPS.N) said on Tuesday it was committed to its 5.2 billion euro ($6.7 billion) bid for Dutch rival TNT Express TNTE.AS and urged EU antitrust regulators to be “reasonable” in assessing it.
The European Commission is worried the proposed merger will reduce the number of players from four to three, leaving the combined UPS/TNT group to compete only with Deutsche Post’s (DPWGn.DE) DHL and FedEx (FDX.N).
The Commission, which regulates antitrust matters in the 27-member European Union, is preparing to detail its objections to the takeover, which will reinforce UPS as the world No. 1 package delivery company.
According to analysts at Bernstein Research, a merged UPS and TNT would have 25 percent of the European express services market, ahead of DHL with 19 percent.
UPS argues that it faces a number of competitors, ranging from French mail company DPD, owned by La Poste LAPST.UL, and Royal Mail’s GBPO.UL European express parcel service GLS, to freight forwarders like Swiss companies Kuehne & Nagel KNIN.VX and Panalpina (PWTN.S).
“We are committed to working this deal through,” said Daniel Brutto, head of UPS International.
“We don’t see any reason why the deal won’t go through if both are reasonable,” he told reporters on a visit to Brussels to meet officials from the EU watchdog.
The growth in e-commerce means consumers are increasingly using package delivery companies, a factor the Commission should take into account, Brutto said.
The Commission is expected to send a statement of objections or charge sheet to UPS within a week of Tuesday’s meeting. The company may have to offer concessions, including asset sales, to soothe regulatory concerns.
The Commission is scheduled to decide on the proposed merger by January 15 next year. ($1 = 0.7730 euros) (Reporting by Foo Yun Chee; Editing by David Cowell)