The European Commission has sent a statement of objections to UPS and Dutch logistics company TNT Express about their proposed merger.
The two companies' agreement on a public offer in March paved the way for the merger after weeks of take-over talks. In July, the commission launched a formal investigation into the proposed acquisition to determine whether the companies' combined market shares in the international express space would impede competition in Europe.
The commission initiates this in-depth investigation, known as a Phase II review, when it has concerns about competition. TNT and UPS say that competition in the area would remain "significant" because multiple other companies provide similar services.
UPS and TNT say that the statement of objections is a normal step in the investigation and that they will respond to the statement in the coming weeks.
UPS and TNT said in June that they had been hoping to close the transaction by the end of 2012, but acknowledged in late August that it would extend the offer period to 9 November in light of the commission's investigation and thus will need until early 2013 to finalise the deal. The companies say they still expect that deadline to stand after receiving the commission's objection.
UPS says a merged company would see more than €45 billion ($58.6 billion) in annual revenues. It made a €5.16 billion ($6.28 billion) offer for TNT Express after it proposed a previous unsolicited offer to acquire the company for €4.9 billion ($6.5 billion) on 11 February, which TNT Express rejected.