TNT shares halved as UPS takeover is blocked

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European Commission regulators are set to block UPS's intended takeover of TNT Express, forcing the freight giant to withdraw its plans.

TNT Express shares have halved to around €4.20 in early trading following the disclosure.

UPS says the Commission has "informed" both companies that it is "working on a decision to prohibit the proposed acquisition".

The company has revised its proposal twice since submitting initial remedies on 29 November last year, in a bid to have the deal approved.

"We are extremely disappointed with the [Commission's] position," says UPS chief Scott Davis. "We proposed significant and tangible remedies designed to address the [Commission's] concerns with the transaction.

"The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular."

UPS will pay TNT a termination fee of €200 million and "will withdraw the offer" upon formal prohibition by the Commission. UPS has not given specific details of the reasoning behind the block.

"Looking ahead, our company focus will be on the continued execution of our growth strategy," says Davis. "While we viewed the acquisition as a compelling growth platform, our financial strength allows UPS to capture future opportunities."