UPS Financing In Place For The Purchase Of TNT Express


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UPS Financing In Place For The Purchase Of TNT Express

By Eddy Metcalf

May 12, 2012 – On Friday UPS announced it has the necessary financing in place for its intended recommended public offer for TNT Express. On March 19, 2012, UPS and TNT Express jointly announced conditional agreement on a recommended all-cash offer of EUR 9.50 per ordinary share for TNT Express (the "Offer"). The transaction values TNT Express at approximately $6.77 billion. 

The Offer values 100% of the issued and outstanding TNT Express ordinary shares at approximately EUR 5.16 billion. UPS will finance the Offer by using approximately EUR 3.7 billion of available cash on its balance sheet and approximately EUR 1.46 billion in debt through existing credit facilities. 

“With this combination, both UPS and TNT Express will significantly enhance their ability to serve our combined customers’ complex global logistics needs. The additional capabilities and broadened global footprint will support the growth and globalization of our customers’ businesses. At the same time, this positions us for future growth, which will benefit our employees and shareowners,” said Scott Davis, UPS Chairman and CEO. 

“This combination will significantly enhance the capabilities of two strong companies.  I am convinced that together we will be the supplier and employer of choice in the express delivery industry. Our customers will greatly benefit from our enhanced combined service offerings. To my 77,000 colleagues I say that the combination will create unique opportunities for development and growth in which we can participate,” said Marie-Christine Lombard, TNT Express CEO. 

In line with regulatory requirements, UPS will submit a request for approval of its Offer Memorandum to the Netherlands Authority for the financial markets. The Offer Memorandum is expected to be published and the Offer is expected to commence during the second quarter in accordance with the applicable timetable. 

TNT Express. is an international express and cargo delivery services company with headquarters in Hoofddorp, Netherlands. The firm has fully owned operations in 65 countries and delivers documents, parcels and pieces of freight to over 200 countries. The company operates road and air transportation networks in Europe, the Middle East and Africa, Asia-Pacific and the Americas. It employs 77,000 people and runs a fleet of 30,000 road vehicles and 46 aircraft. The company recorded sales of over €7.2 billion in 2011. 

This transaction will create a global leader in the logistics industry with more than $60 billion in annual revenues and an enhanced, integrated global network. The complementary strengths of both organizations will create a customer focused global platform that will be a leader in transportation technology and customer service. 


The combination underlines UPS’s long-standing commitment to Europe by expanding its express capabilities in Europe. The integration of TNT Express’ leading intra-Europe road freight network will expand UPS’s logistics solutions in Europe. TNT Express customers will benefit from UPS’s access to the North American market, as well as access to its logistics solutions, such as global freight forwarding and distribution capabilities. 

The combination deepens UPS’s existing position in fast-growing regions such as Asia-Pacific and Latin America. The proposed transaction will create additional value for UPS’s shareholders by accelerating UPS’s international growth, further connecting the world. 

UPS estimates that the transaction will deliver an annual run rate of approximately $525 to $725 million of pre-tax cost synergies achieved by the end of year four after closing. The transaction is expected to be EPS accretive in year one. Upon completion of the integration, UPS expects to generate returns in line with its existing target ROIC.

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