DALLAS (Bloomberg) - FedEx Corp is in discussions to acquire financially struggling Dutch logistics company TNT Express to expand package deliveries in Europe, people familiar with the matter said.
An agreement may be announced this week, said one of the people, who asked not to be identified because the details are private. Talks are continuing, and it's still possible no accord may be reached, the people said. TNT's market value as of April 2 was 3.29 billion euros (S$4.88 billion).
The planned acquisition comes more than two years after FedEx competitor United Parcel Service Inc. scrapped its own bid to purchase TNT after European regulators moved to block the deal. Adding TNT will bolster the European air and ground network for FedEx, the operator of the world's largest cargo airline. Expansion in Europe is one pillar of Chief Executive Officer Fred Smith's 2012 plan to boost profit by US$1.7 billion.
Erin Truxal, a FedEx spokeswoman, had no immediate comment when asked about the talks with TNT. A call to Hoofddorp, Netherlands-based TNT before regular business hours Tuesday wasn't picked up.
For TNT, completing the sale would mark success in its effort to find either a turnaround strategy or an alternative exit plan since the US$6.9 billion UPS bid fell apart in January 2013. TNT competes in Europe against companies including Deutsche Post's DHL Express unit.
TNT has been selling assets to bolster its finances and focus more on European overland transport. Struggling with four straight annual losses, the company shed its Dutch fashion operations in 2014 and an unprofitable Chinese trucking unit in November 2013.
European Union regulators formally blocked UPS's TNT bid because the company failed to find a suitable buyer for parts of TNT to ensure that competition for delivery services wouldn't be squelched.
With FedEx's limited reach across Europe, a UPS-TNT deal would have limited some shipping customers' choices for next-day deliveries to just UPS and DHL, regulators said at the time.
FedEx has a history of buying smaller companies around the globe, including in Poland, France, South Africa and Brazil. In January, the company closed its most- recent major purchase, the US$1.4 billion acquisition of product- return firm Genco Distribution System Inc.