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(Graphic: Business Wire)

Stocks in this article: UPS

United Parcel Service, Inc. (NYSE: UPS) and TNT Express N.V. (NYSE Euronext: TNTE):

Transaction Highlights

  • United Parcel Service, Inc. (“UPS”) and TNT Express N.V. (“TNT Express”) have reached agreement on a recommended all-cash offer of €9.50 per ordinary share for TNT Express, representing a premium of 53.7% to the unaffected share price of TNT Express of €6.18 on February 16, 2012, the day before TNT Express and UPS announced their on-going discussions
  • The transaction values TNT Express at approximately €5.16 billion ($6.77 billion (1))
  • The Executive and Supervisory Boards of TNT Express unanimously intend to support and recommend the offer

Compelling Strategic Rationale with Significant Benefits for All Stakeholders

  • The transaction will create a global leader in the logistics industry with more than €45 billion ($60 billion (1)) in annual revenues and an enhanced, integrated global network
  • The complementary strengths of both organizations will create a customer-focused global platform that will be a leader in transportation technology and customer service
  • The combination underlines UPS’s long-standing commitment to Europe by expanding its express capabilities in Europe
  • The integration of TNT Express’ leading intra-Europe road freight network will expand UPS’s logistics solutions in Europe
  • TNT Express customers will benefit from UPS’s unparalleled access to the North American market, as well as access to its logistics solutions, such as global freight forwarding and distribution capabilities
  • The combination deepens UPS’s existing position in fast-growing regions such as Asia-Pacific and Latin America
  • The proposed transaction will create additional value for UPS’s shareholders by accelerating UPS’s international growth, further connecting the world
  • UPS estimates that the transaction will deliver an annual run rate of approximately €400 to €550 million ($525 to $725 million (1)) of pre-tax cost synergies achieved by the end of year four after closing
  • The transaction is expected to be EPS accretive (2) in year one
  • Upon completion of the integration, UPS expects to generate returns in line with its existing target ROIC
  • The combination of the two businesses benefits from a strong cultural fit as both entities have strong management teams that focus on customer service, operational excellence and good corporate citizenship
  • The combined business will offer employees enhanced career opportunities

    1 Assuming FX spot rate as of 3-16-2012 of EUR / USD 1.3116 (Source: ECB)

    2 On an as adjusted basis – expected to be accretive inclusive of net synergies

United Parcel Service, Inc. (NYSE: UPS) and TNT Express N.V. (NYSE Euronext: TNTE) today jointly announce that they have reached agreement on a recommended all-cash public offer of €9.50 per ordinary share by UPS for TNT Express (the “Offer”). TNT Express’ Executive and Supervisory Boards unanimously intend to support and recommend the Offer.

The offer price of €9.50 (including any dividend or other distribution other than the financial year 2011 final dividend payment not exceeding €0.004 per share) represents a 53.7% premium to TNT Express’ unaffected share price on February 16, 2012 of €6.18, the day before TNT Express and UPS announced their ongoing discussions. The Offer values the issued and outstanding share capital of TNT Express at €5.16 billion ($6.77 billion (1)).

The combination of UPS and TNT Express will create a global leader in the logistics industry, with annual revenues of more than €45 billion ($60 billion (1)) and will deliver significant benefits for the shareowners, customers, employees and other stakeholders of both companies.

Together, UPS and TNT Express will offer customers an enhanced, integrated global network that will provide greatly enhanced service to customers throughout the world. In addition, the two companies are a strong cultural fit given their intense focus on customer service, operational excellence, employee engagement and good corporate citizenship.

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