UPS Suing European Commission for $2.14b over blocked TNT merger

TransportationDow Jones Newswires

A UPS driver steps off his truck to deliver packages in Evanston, Illinois, REUTERS/Jim Young 

United Parcel Service is suing the EU's antitrust watchdog for 1.74 billion euros ($2.14 billion) plus interest over the regulator's 2013 decision to block a planned $7 billion merger with Dutch parcel-delivery company TNT Express, according to court documents published Monday.  The European Commission formally blocked the UPS-TNT deal at the end of January 2013 over concerns the overnight-parcel-delivery market would effectively become a duopoly between a combined UPS-TNT business and DHL, a unit of Deutsche Post.  UPS is now seeking compensation from the commission for that decision, which the company says prevented it from "materializing the benefits associated with that proposed transaction."  "We feel strongly that the proposed acquisition would have constituted a good deal for logistics customers," said Gregg Svingen, international director for public relations and communication at UPS. "The compensation being sought corresponds to what we believe, through objective assessments verified by expert third parties, to be the value of the opportunity wrongly prohibited by the European Commission."  The European Commission will defend itself in court, an EU spokesman said.  The European Union's second-highest court last year overturned the European Commission's 2013 decision on the basis of procedural missteps by the regulator. The commission is appealing that judgment.  The overnight-parcel-delivery landscape has changed since the commission's 2013 decision, and any renewed attempt at a merger between UPS and TNT looks unlikely.  After UPS called off its merger in mid-January 2013 following stiff objections to the deal from the EU, logistics rival FedEx Corp. stepped in to acquire TNT in May 2016 for EUR4.4 billion, expanding its reach in Europe.

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Write to Natalia Drozdiak at natalia.drozdiak@wsj.com