A&O, Bakers and Freshfields advise as €5.2bn UPS-TNT deal falls through

Allen & Overy (A&O), Baker & McKenzie and Freshfields Bruckhaus Deringer have advised as the proposed €5.2bn (£4.2bn) takeover by UPS of Dutch delivery group TNT Express collapses after failing to get past the European Commission (EC).

The official decision by EU competition chief Joaquín Almunia has not yet been officially filed but the buyout has fallen through after the EC indicated it was against the deal.

Freshfields acted for UPS on the nine-month negotiations, with an antitrust team led by partners Winfred Knibbeler in Amsterdam and Alan Ryan in Brussels.

TNT was represented by A&O Amsterdam competition head Paul Glazener.

Competitor FedEx opposed the transaction and instructed Baker & McKenzie Brussels competition head Fiona Carlin and partner Gavin Bushell.

It is one of the biggest transactions that the EC has ruled against and is a major blow to both companies who had confidently predicted phase-one clearance, with some divestments in European markets to competitors.

UPS will pay TNT a €200m (£166m) break fee as a consequence of withdrawing the offer.

Lawyers in the sector say that the break agreement showed the level of confidence in the deal being approved.

It would have further strengthened the world’s biggest package-delivery company’s presence in Europe.

But Europe’s antitrust regulator is set to rule that the takeover would have left many markets with only two ‘integrators’ – companies that combine air and road delivery capacities – undermining competition in the delivery sector and leaving customers with too little choice.

Because rival FedEx is mainly transatlantic, it would have left only DHL against UPS-TNT.

UPS have not yet officially abandoned the bid, so they may wait to see the official decision and lodge an appeal.

UPS CEO Scott Davis said he was “extremely disappointed”.

Almunia will give an official ruling on 5 February.

Last year, aerospace groups BAE Systems and EADS called off their €36bn merger (11 October 2012).

Background to this deal:

UPS is a long-standing client of Freshfields, with corporate partners in Amsterdam Jan Willem van der Staay and Alexander Doorman leading the team on the initial offer in March 2012.

The team also included corporate associates Hanneke Rothbarth, Marike Kuin and David Wakkie, antitrust specialists Winfred Knibbeler, Alan Ryan and Peter Schepens, Machiel Lambooij and Job van der Pol (both tax) and Brechje Nollen and Désirée Kemperink (both employment).

TNT is a client of A&O Amsterdam corporate partner Jan Louis Burggraaf.