American courier company UPS has called off its planned merger with Dutch peer TNT Express because of objections from Brussels, TNT said on Monday.
The news led TNT’s share price to plunge around 50% on the Amsterdam stock exchange in early trading. Post NL, which owns nearly 30% of TNT’s shares, was down 34%.
The collapse of the takeover comes after a meeting with officials in Brussels, at which it emerged the working group looking into the deal were working towards a ban. UPS decided to pull out, TNT said in a statement.
‘TNT Express regrets this situation, having believed the merger was feasible and beneficial for all stakeholders,’ the Dutch firm said. ‘UPS has confirmed to TNT Express payment of the agreed €200m termination fee.’
UPS agreed to pay €5.16bn or €9.50 a share for Dutch group TNT Express in March 2012. TNT Express was spun off when TNT Post split into its express arm and PostNL in 2011.
However, objections from Brussels, which fears the new group would have a dominant position in several European countries, led to delays. The original takeover deal was revised at least twice.
Recognising the protracted takeover had been a ‘distraction for management’, the company will now soley focus on reassuring customers and staff and strengthening its strategy ‘including further steps to improve profitability’, TNT said.