UPS is confident it can close its proposed acquisition of TNT Express by early 2013 despite a statement of objections that the European Commission sent the company last week, said the company's chief executive D. Scott Davis during the company's third quarter investor call yesterday.
"UPS still expects to close this transaction early next year," Davis said. "We have committed to complete this acquisition and enhance our position in the logistics industry."
UPS and TNT Express agreed on a €5.16 billion offer ($6.7 billion at current rates) for the transaction in March and had hoped to close the transaction by the end of 2012. The companies acknowledged that the process would take longer in late August after learning that the Commission would initiate a Phase II review of the proposed acquisition. The in-depth investigation is initiated when the commission has competition concerns.
Davis underscored that the statement of objections is a normal order of business when speaking to investors, and said he is confident the company will get clearance for the transaction next year. He said UPS is working closely with the Commission and will spend substantial time in the coming weeks to exchange information and respond to the document.
UPS completed a debt issuance in the past few weeks in anticipation of the TNT merger, said Kurt Kuehn, the firm's chief financial officer. He said the company does not anticipate needing a long-term debt issuance to fund the acquisition.