The Commission prohibited the proposed acquisition of TNT Express by UPS. UPS, of the US, is a global provider of specialized transportation and logistics services. TNT is a Dutch company also active in the global logistics markets. In the EEA, both companies are active in small package delivery services, air and road cargo transport, freight forwarding and contract logistics. The Commission's investigation focused on the market for international express deliveries of small packages in the EEA. The main providers of these services are so-called integrators that control international integrated air and ground small package delivery networks. There are only four integrators in Europe: UPS, TNT, DHL and FedEx. FedEx has low market shares in a number of countries and does not exercise a significant competitive constraint. Other market players, such as national postal operators, can only compete to a limited extent because they do not reach comparable efficiency or reliability, given their heavy reliance on road transport. Thus, the Commission was concerned that the proposed acquisition, as initially notified, would have restricted competition in 15 Member States, where customers would only have been able to choose between UPS, DHL and sometimes FedEx for the services they need, which would likely lead to price increases. To address the Commission’s concerns, UPS proposed to divest TNT’s subsidiaries in the 15 relevant Member States and in addition, under certain conditions, TNT’s subsidiaries in Spain and Portugal, to increase the volume of small package express deliveries that would be transferred to the purchaser. Further, UPS offered access to its air network for 5 years. However, the Commission found the remedies inadequate to address the competition concerns. The Commission found that there were only very few suitable buyers and even in regard to them the Commission had serious doubts as to their ability to exercise a sufficient competitive constraint on the merged entity. Further, UPS did not propose an “up front” buyer to the Commission and was unable to sign such an agreement before the end of the Commission’s investigation. Therefore, the Commission found the proposed remedies insufficient to remove the competition concerns and prohibited the acquisition. Source: Commission Press Release 30/01/2013
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Commission prohibits proposed acquisition of TNT Express by UPS
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