EU delivers 'statement of objections' against UPS planned TNT buyout

THE European Commission (EC) has issued a "statement of objections" to UPS and TNT Express as a result of their probe into the planned takeover of TNT Express by UPS.

The "statement of objections" lists the competition authority's interim conclusions arising from its investigation.

A joint statement from the two companies confirmed they had received the document, but did not divulge its contents another than to say it "addresses the competitive effects of the intended merger on the international express small package market in Europe," reported the UK's Transport Intelligence.

The statement of objections has been described a "normal step in a second phase merger procedure" and that it is a "confidential document that sets out a provisional position of the EC and does not prejudge the final outcome of the case".

The report noted that rumours have been circulating that the EC's concerns focus on services to and between 'peripheral' countries in Europe, such as those in southern Europe.

"The implication is that UPS-TNT Express would be forced to sell operations around air express in peripheral markets. This may prove difficult, as they are organic to either the air or road networks of either of the two companies. It is assumed that some part of these operations may be sold to FedEx, however if this is possible, some smaller local companies might be just as well positioned in these markets," said the Ti report.

UPS and TNT Express added in the release that they expected to respond to the European Commission "within a couple of weeks" and "complete the transaction in early 2013."