FedEx CEO On TNT Acquisition

FedEx Corporation (NYSE: FDX) announced on Tuesday that it will be acquiring TNT Express NV – ADR (OTC: TNTEY) in a $4.8 billion deal.

Fred Smith, Fedex chairman and CEO, was on CNBC recently to discuss the terms and details of the acquisition.

Mutually Beneficial Deal

"The UPS transaction was terminated; it was not approved by the European competition authorities. And the reasons for that are quite different in our case," Smith said.

"We have looked very carefully at the market share numbers in each of the markets, and we believe that we will meet the test for approval. And, remember, this deal from FedEx's standpoint is not based on lots of redundancies to get the synergies."

Related Link: Why The FedEx-TNT Deal Makes Sense

He continued, "It's a synergy of combining networks for more productive operations – particularly the pickup and delivery operations – and broadening the portfolio for increased volume share. And so we think this is a very good deal for both companies' workforces, as well as meeting the regulatory test."

Regulatory Hurdles Not On Radar

Smith was asked why it will take a long time for the deal to be complete and what kind of regulatory hurdles it could face. He replied, "It may well be time-consuming, which is why we put into the press release – which, by the way, was very long [in order] to meet Dutch law, and I think that led some people to believe we have greater concerns in that regard than is actually the case."

He continued, "But the EU, the United States, China and Brazil will all be involved in an oversight process on this transaction. And we believe we will be successful in getting it approved in all of those venues," Smith concluded.

 
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