September 30, 2022

DealBook: U.P.S. to Withdraw $6.9 Billion Takeover of TNT Express

European antitrust authorities have raised concerns over U.P.S.'s proposed $6.8 billion takeover of TNT Express.Peter Dejong/Associated PressEuropean antitrust authorities had raised concerns over U.P.S.’s proposed $6.9 billion takeover of TNT Express.

7:38 a.m. | Updated

LONDON — United Parcel Service announced on Monday that it would withdraw its $6.9 billion takeover offer for TNT Express, a Dutch shipping company, after European antitrust authorities told U.P.S. that they would block the deal.

The announcement is a blow to U.P.S.’s expansion outside of the United States as the deal for TNT Express would have given the American company a larger presence in European and emerging markets.

Since first announcing the deal last March, U.P.S. had faced difficulties with European regulators, who feared that the takeover would hamper competition.

To appease antitrust concerns, U.P.S. had agreed to sell a number of business units and to grant access to some of its airline network to rivals. TNT Express also said it would sell its own airline operations as part of the antitrust concessions.

The company had been locked in negotiations with European regulators since November, but was told late last week that its proposed concessions did not meet authorities’ demands. U.P.S. had tried to convince regulators that selling assets to the French shipping company DPD would create enough competition to satisfy regulatory concerns.

The steps did not go far enough.

Competition authorities at the European Commission informed both companies that they would not approve the multibillion-dollar takeover, according to separate statements from U.P.S. and TNT Express on Monday. European officials have until early February to rule officially on the proposed takeover.

“We are extremely disappointed with the European Commission’s position,” U.P.S.’s chief executive, D. Scott Davis, said in a statement. “We proposed significant and tangible remedies designed to address the European Commission’s concerns with the transaction.”

The failure to reach an agreement comes at a difficult time for TNT Express, which has reduced its operations across Europe and faced a series of setbacks in emerging economies like Brazil and China. While the Dutch company has large operations across Europe, analysts say it would need a large injection of investment to expand globally.

Potential new suitors could include FedEx, whose European business is smaller than that of U.P.S., while a potential deal with the European shipping giant DHL would raise too many antitrust concerns, according to analysts.

Shares in TNT Express fell 40 percent, to 4.94 euros, or $6.60, in morning trading in Amsterdam on Monday. U.P.S.’s failed offer for the Dutch shipping company was 9.50 euros for each share in the Dutch shipping company.

The stock price of PostNL, the largest shareholder in TNT Express, also dropped 35 percent in morning trading on Monday.

“The European Union‘s decision is very disappointing,” said Stephen Furlong, an analyst at Davy Research in Dublin, who rates TNT Express as underperform. “It’s hard to see the company being bought by anyone else.”

After failing to win regulatory approval, U.P.S. has agreed to pay a 200 million euros, or $267 million, termination fee to TNT Express, according to a company statement. The takeover would have been U.P.S.’s largest acquisition in the company’s 105-year history, according to the data provider Capital IQ. U.P.S. will continue to look for opportunities to grow organically and through acquisitions, according to a company spokeswoman.

U.P.S.’s acquisition of TNT Express is the largest failed takeover since the European aerospace giants BAE Systems of Britain and European Aeronautic Defense and Space, or EADS — the parent of Airbus — ended their proposed $45 billion merger talks in October after local politicians and shareholders balked at the deal.

The decision against U.P.S.’s takeover of TNT Express also is the latest move by European competition authorities to thwart multibillion-dollar deals that they believe are against consumers’ interest. Last year, NYSE Euronext and Deutsche Börse called off their planned $9.2 billion merger after European antitrust regulators opposed the deal.

Morgan Stanley, UBS, Bank of America Merrill Lynch and the law firm Freshfields Bruckhaus Deringer had advised U.P.S., while Goldman Sachs, Lazard and the law firm Allen Overy had advised TNT Express and its supervisory board.

Article source: http://dealbook.nytimes.com/2013/01/14/u-p-s-to-withdraw-6-9-billion-takeover-of-tnt-express/?partner=rss&emc=rss

DealBook: Path Cleared for News Corp.’s BSkyB Bid

Rupert Murdoch on June 21 at The Times C.E.O. summit in London.Pool photo by Ben GurrRupert Murdoch on June 21 at The Times C.E.O. summit in London.

British regulators confirmed on Thursday that they were ready to pave the way for News Corporation’s takeover of the pay television company BSkyB.

The government said that a long review of the deal, which the News Corporation offered to adjust in order to satisfy regulatory concerns, had “produced no new information” to change the official stance to allow the acquisition.

With that, the News Corporation is one step closer to buying the 60.9 percent of BSkyB that it does not already own, leaving the price of the takeover as the chief remaining uncertainty.

Concessions made by Rupert Murdoch’s media empire to spin off Sky News, BSkyB’s popular news channel, were enough to appease the concerns of Culture Minister Jeremy Hunt, who said in March that he was “minded to accept” the proposal.

Mr. Hunt, however, has submitted a few more conditions to closing the deal. These include appointing an independent director with experience in journalism to the Sky News editorial board, ensuring that BSkyB continues to cross-promote Sky News after the spin-off and appointing a trustee to monitor the News Corporation’s compliance with the rules in the transition period.

“The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality,” Mr. Hunt said on Thursday in a statement. “I could have decided to accept the original undertakings, but a number of suggestions were made in response to the consultation.”

Given the proposed changes, Mr. Hunt extended the review period until July 8, but government backing is all but assured. Issues of media plurality have delayed the acquisition, given that the News Corporation owns the British newspapers The Times, The Sun and News of the World.

Now, Mr. Murdoch is left to haggle with BSkyB shareholders, many of whom expect a higher offer than the 700 pence a share he bid last summer, which values the 60.9 percent stake at £7.8 billion.

BSkyB responded at the time that its management would support an offer worth more than 800 pence, and some analysts think the final proposal could be well in excess of that.

Nick Bell, an analyst with Jefferies, said he thought a bid of 850 pence a share was likely, but that expectations of anything above 900 pence were unrealistic.

Article source: http://feeds.nytimes.com/click.phdo?i=c4b4076a533b5605b546af14226948aa

DealBook: UBS Is Said to Be Weighing Move of Investment Bank

LONDON — As new rules to regulate banks take shape around the world, they are increasingly seeking ways to soften the impact.

UBS, one of Switzerland’s biggest banks, is considering a switch to a holding structure, and then incorporating the investment banking business as a separate legal entity in London, two people with direct knowledge of the idea said on Thursday. They declined to be identified because no decision had been made.

UBS said in March that it was “evaluating potential changes to our booking model and corporate structure in view of developing regulatory concerns and requirements.” The bank also said its model of holding most of its capital in Switzerland while booking most of its assets elsewhere would probably have to change.

Under the proposal, the investment banking business, whose losses during the financial crisis required UBS to accept government aid, would be capitalized separately.

The proposal was reported earlier by The Wall Street Journal.

UBS said on Thursday that the report was speculation and that the bank “doesn’t comment on speculation.”

Guy de Blonay, a fund manager at Jupiter Asset Management, said: “Reading between the lines they’re saying ‘I’ve got some opportunities that I want to exploit, but under the current regulation I can’t do it, so if you’re too strict we go elsewhere.’ And that’s the same with any other bank.”

Other banks, including Barclays in Britain, were reviewing the way they financed themselves and generated earnings, as regulators have started to introduce stricter capital rules. Barclays and HSBC were among the banks that threatened to move their headquarters abroad should new rules at home be too punishing and hurt their competitiveness.

But any decision has to be put off amid continued uncertainty about the details of the new rules, which have yet to go through the British Parliament.

Switzerland is considering asking UBS and Credit Suisse, the country’s two largest banks, to hold capital equal to at least 19 percent of assets from 2019, more than other countries in Europe. The Basel committee proposed capital requirements of 10.5 percent of risk-weighted assets and said that some countries could set a higher level for its biggest banks.

UBS and Credit Suisse previously warned the Swiss government that introducing rules that were stricter than in other countries would put them at a competitive disadvantage and could hurt the Swiss economy.

In Britain, the government is awaiting the final report of a banking commission, due in September, that is likely to propose a partial separation of investment banking businesses from retail operations.

A so-called ring fencing of deposit-taking parts of the business would help avoid a collapse of the entire bank should the investment banking unit get into trouble, the commission argued.

Article source: http://dealbook.nytimes.com/2011/05/26/ubs-weighs-moving-investment-bank-out-of-switzerland/?partner=rss&emc=rss

DealBook: UBS Weighs Moving Investment Bank Out of Switzerland

LONDON — As new rules to regulate banks take shape around the world, they are increasingly seeking ways to soften the impact.

UBS, one of Switzerland’s biggest banks, is considering a switch to a holding structure, and then incorporating the investment banking business as a separate legal entity in London, two people with direct knowledge of the idea said on Thursday. They declined to be identified because no decision had been made.

UBS said in March that it was “evaluating potential changes to our booking model and corporate structure in view of developing regulatory concerns and requirements.” The bank also said its model of holding most of its capital in Switzerland while booking most of its assets elsewhere would probably have to change.

Under the proposal, the investment banking business, whose losses during the financial crisis required UBS to accept government aid, would be capitalized separately.

The proposal was reported earlier by The Wall Street Journal.

UBS said on Thursday that the report was speculation and that the bank “doesn’t comment on speculation.”

Guy de Blonay, a fund manager at Jupiter Asset Management, said: “Reading between the lines they’re saying ‘I’ve got some opportunities that I want to exploit, but under the current regulation I can’t do it, so if you’re too strict we go elsewhere.’ And that’s the same with any other bank.”

Other banks, including Barclays in Britain, were reviewing the way they financed themselves and generated earnings, as regulators have started to introduce stricter capital rules. Barclays and HSBC were among the banks that threatened to move their headquarters abroad should new rules at home be too punishing and hurt their competitiveness.

But any decision has to be put off amid continued uncertainty about the details of the new rules, which have yet to go through the British Parliament.

Switzerland is considering asking UBS and Credit Suisse, the country’s two largest banks, to hold capital equal to at least 19 percent of assets from 2019, more than other countries in Europe. The Basel committee proposed capital requirements of 10.5 percent of risk-weighted assets and said that some countries could set a higher level for its biggest banks.

UBS and Credit Suisse previously warned the Swiss government that introducing rules that were stricter than in other countries would put them at a competitive disadvantage and could hurt the Swiss economy.

In Britain, the government is awaiting the final report of a banking commission, due in September, that is likely to propose a partial separation of investment banking businesses from retail operations.

A so-called ring fencing of deposit-taking parts of the business would help avoid a collapse of the entire bank should the investment banking unit get into trouble, the commission argued.

Article source: http://feeds.nytimes.com/click.phdo?i=9af7df4e036da6b0746e1503ec4bd638