This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Moving Forward Sans Merger - Research Report On United Parcel Service, Inc.

NEW YORK, January 24, 2013 /PRNewswire/ --

On withdrawing its offer, United Parcel Service, Inc. (NYSE: UPS) [ Full Research Report] [ 1 ] paid a termination fee of $265.5 million to Dutch shipping company, TNT Express. The European Commission announced that their objection is primarily due to concerns about future market competition for overnight delivery of parcels across Europe.

If ever the merger happens, this is good news for TNT, but could mean bad news for other messenger companies in Europe. Considered as the world's largest package delivery company and the leading global provider of specialized transportation and logistics services, UPS could have given TNT the chance to dominate the European market.

But the European Commission feared that the merger could negatively influence the market dynamics as UPS would have monopolized the delivery business in Europe and might bring unfair competition, affecting pricing policies and services, thus impacting end-users.

Although UPS can sustain and move forward without the acquisition, it is still a big disappointment for the company, as its chances of boosting its footprint in Europe and consolidating its position as a global leader did not materialize. It could also mean losing significant synergies for UPS.

TNT could have been UPS' biggest acquisition. Despite this failed agreement, the company is still aiming to acquire smaller companies. "While we viewed the acquisition as a compelling growth platform, our financial strength allows UPS to capture future opportunities," said Scott Davis, UPS Chairman and CEO. Analysts' equity summary score for UPS is bullish at 7.9 with a neutral recommendation, given this renewed focus on core operations, allowing for potential margin expansion.

The company has also been upgraded from a "hold" rating to a "buy" rating, as analysts see a more aggressive capital deployment and fewer headwinds constraining share performance following the merger termination between UPS and TNT.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs