“It was becoming a distraction,” he said. “It’s disappointing they didn’t get the deal done. It doesn’t change the fabric of the company.”
While TNT’s stock price plummeted 41.3 percent after the deal fell through, UPS’ rose 1.7 percent.
“Our success in Europe does not depend on TNT,” said Peggy Gardner, a UPS spokeswoman.
Gardner said the concessions UPS offered to the Commission “changed a rather large amount” between the initial offering in November and the third one earlier this month, but would not detail what UPS had offered in order to complete the deal. UPS said it had proposed “tangible remedies,” but after meeting with regulators on Jan. 11, it told TNT it saw no prospect of the deal being approved.
The Commission reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market. It has the power to block deals or to demand concessions, such as the sale of business parts, to safeguard market balance.
The Commission’s primary concern, Gardner said, was the unlikelihood that a new, equal competitor would come in to the market. Deutsche Post’s DHL is the largest delivery company in Europe, and its chief competitors are UPS, TNT and FedEx. The Commission has not yet released its decision, but has a Feb. 5 deadline to do so.
UPS is able to grow in Europe on its own, but acquiring TNT would have eliminated a competitor and created an easier path to growth, said Doug Caldwell, the vice president of international for AFMS.
Caldwell said UPS “clearly underestimated” the level of opposition to the deal, which was announced last March.
UPS had earmarked $5 billion in cash for the purchase. Sterne Agee analyst Jeffrey Kauffman said he expected the company to now use some of that for dividends or share buybacks. He said UPS could also pursue smaller acquisitions, especially in Asia.
Before UPS jumped in, some analysts thought rival FedEx might make an offer for TNT, but FedEx executives said in March they had no plans to do so. U.S. analysts don’t expect FedEx to reconsider in the near-term because it’s in the midst of a major restructuring of its express air cargo service. FedEx declined to comment.
The Associated Press contributed to this article.