Freight giant UPS has agreed in principle to acquire TNT Express through an all-cash offer which values TNT at €5.16 billion ($6.77 billion).

UPS will pay €9.50 per share for TNT Express, says the US firm, a premium of nearly 54% on the share price on 16 February.

It states that the transaction will "create a global leader in the logistics industry" with over €45 billion in annual revenues.

The takeover will be "accretive" to earnings per share from the first year, says UPS, and also provide €400-550 million in pre-tax cost synergies by the end of the fourth year.

TNT Express's boards are unanimously recommending the offer, having previously held out against the acquisition. TNT shareholder PostNL, which has nearly 30% of the company, has committed itself to the offer.

"With this combination, both UPS and TNT Express will significantly enhance their ability to serve our combined customers' complex global logistics needs," says UPS chief Scott Davis.

TNT Express has a fleet of some 50 aircraft against more than 220 at UPS. The two companies are to establish an integration committee to develop a strategy to combine their logistics networks.

Source: Air Transport Intelligence news