Impact Publications : Aircargo_238
AirCArgo AsiA-PACifiC • AUGUST-SEPTEMBER 2015 • Page 3 FedEx TNT buyout – what will the mega-merger mean? TAkinG over a global transport and logistics company is a whole lot more than sending an email offering to pay mega-bucks and the target company calling back with a “yes, thanks, look forward to your e-transfer of 4.4 billion euros”. The FedEx Corporation’s proposal to buy – through a wholly-owned subsidi- ary – “all of the issued and outstanding shares” in TnT Express nV is progress- ing slowly but seemingly with a gener- ally positive outlook through regulato- ry approval channels which involve not only the EU but also Australia and new Zealand. Both the Australian Competition & Consumer Commission (ACCC) and the nZ Commerce Commission (nZCC) have responded to FedEx’s acquisition/merger proposal by trigger- ing the mechanism set up to give the market protection against reduction of competition and subsequent impact on pricing. Others asked by FedEx to get the wheels of regulatory approval turning include Russia, South korea, Brazil, China, Chile, Colombia, israel, Japan, Turkey and Ukraine. ACCC has formally sought submis- sions from interested parties - which includes competitors, sector organisa- tions or anyone else. The deadline for e-filing is September 3. Provisional date for a decision is October 29. This might be a final ruling (open to appeal if FedEx or any other major player is unhappy with it) or alternatively a provisional one which might show where ACCC is heading and any pitfalls it views as necessary to resolve. in its request for submissions – sent to those identified as interested parties with a welcome to pass it on to others if wished – ACCC asked for advice on various scenarios as well as the general provisos of a competitiveness investi- gation. One asks submitters: “Do you con- sider that the merged entity would have an increased ability to increase prices or reduce service levels to customers in Australia or would it be prevented from doing so by competi- tion from DHL, UPS and others?” And, it requests, “please address the potential for (i) Australia Post (includ- ing Star Track Express); (ii) Toll; and (iii) freight forwarders generally (for exam- ple, of shipments over 50kg), to be effective competitors to the merged entity in relation to supply of express international small package delivery services to customers in Australia”. it also asks submitters to “identify any relevant barriers to expansion by existing providers of express interna- tional small package delivery services in Australia, or entry by new providers. “Do you consider it likely that exist- ing competitors would expand and/ or new competitors would enter if the merged FedEx/TnT increased prices or reduced service levels? “Would you expect the proposed acquisition to increase these barriers to entry/expansion?” Submissions are confidential to the extent that they are neither published nor disclosed to a third party other than ACCC advisers or consultants. But they can be made public in certain circumstances when compelled by law; ACCC is then required to advise the submitter/s so they have an opportuni- ty to be heard. nZCC has asked even more detailed questions of submitters as it under- takes its investigation. its aim is to have a decision ready by September 25 but warns this might be extended depending on how the investigation progresses. in Europe, things also are moving along. The EC has initiated a ‘phase ii review’ which calls for more informa- tion – this is the next step in the pro- cess where the European Commission conducts an in-depth analysis under the EU Merger Regulation before coming to a decision. David Binks, president of FedEx Express Europe, said the group was confident the combination would in- crease competition and create benefits for customers. “We continue to make progress on all of the necessary regulatory steps around the world that would allow us to complete this transaction in the first half of 2016 and unite two great teams that share a passion for customer service.” TnT Express shareholders are to consider the FedEx offer on October FedEx B763 freighter... Continued page 6.