US delivery giant United Parcel Service (UPS) said on Monday that it was pulling out of its multi-billion-euro bid for Dutch firm TNT Express after EU competition authorities said they would probably block the deal.
“UPS informed TNT Express that UPS sees no realistic prospect that EC (European Commission) clearance can be obtained and that UPS will not pursue the transaction on any other basis,” UPS said in a statement from Hoofddorp in the Netherlands.
The decision is despite an attempt by UPS last year to overcome competition concerns by amending its 5.16-billion-euro ($7.03 billion) bid.
EU competition authorities had warned that the takeover as constructed would result in damaging concentration in the European market for express delivery.
EU competition officials met UPS and TNT Express representatives on Friday and “informed the companies that on the basis of UPS’s current remedy proposal it is working towards proposing a prohibition decision.”
UPS then told TNT it would not continue chasing the deal and that “formal termination of the merger protocol will occur upon receipt of the prohibition decision of the EC, which…TNT Express deems inevitable,” it said.
In June, UPS launched a bid to take over TNT Express, but the EU competition authorities announced a month later that they would investigate the deal.
The EU said it was worried that the proposed merger would reduce the number of competitors from four to three and lead to a highly concentrated market for domestic and international express delivery services on the European continent.
The deal was expected to put UPS ahead of its two competitors as it would strengthen its position in Europe and globally.
[Image via Agence France-Presse]