FedEx to expand European operations with €4.4bn TNT Express acquisition

Courier delivery firm FedEx has agreed to acquire TNT Express in an all-cash deal that values the Dutch logistics company at €4.4bn (£3.3bn, $4.8bn).

The companies said in a joint statement they have reached a conditional agreement on a recommended all-cash offer for shares of TNT Express for a cash offer price of €8 per share. The offer price represents a premium of 33% over the closing price of TNT shares on 2 April.

They added the combined firm "would be a strong global competitor in the transportation and logistics industry" with its "considerably enhanced, integrated global network".

FedEx intends to expand its package delivery business in Europe with the acquisition. TNT Express is one of the leaders in Europe's road freight industry. With about 65,000 employees, the company operates in more than 200 countries.

"This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth," said Frederick Smith, chairman and CEO of FedEx.

"We truly believe that FedEx's proposal, both from a financial and a non-financial view, is good news for all stakeholders. Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run," said Tex Gunning, CEO of TNT Express.

FedEx intends to finance the acquisition, which has been unanimously approved by the boards of both companies, by utilising available cash resources and through existing and new debt arrangements.

The companies expect that the offer will close in the first half of calendar year 2016.