UPS Sues EU Regulator for $2.15 Billion Over Decision to Block TNT Deal

By Natalia Drozdiak

BRUSSELS -- United Parcel Service Inc. is suing the European Union's antitrust watchdog for EUR1.74 billion ($2.15 billion) plus interest over the regulator's 2013 decision to block a planned $7 billion merger with Dutch parcel-delivery company TNT Express NV, according to court documents published Monday.

The European Commission formally blocked the UPS-TNT deal at the end of January 2013 over concerns the overnight-parcel-delivery market would effectively become a duopoly between the combined company and DHL, a unit of Deutsche Post AG.

However, the European Union's second-highest court last year overturned the decision on the basis of procedural missteps by the regulator. The commission is appealing that judgment.

UPS is now seeking compensation from the commission for the 2013 decision, which the company says prevented it from "materializing the benefits associated with that proposed transaction."

"We feel strongly that the proposed acquisition would have constituted a good deal for logistics customers," said Gregg Svingen, a spokesman for UPS. "The compensation being sought corresponds to what we believe, through objective assessments verified by expert third parties, to be the value of the opportunity wrongly prohibited by the European Commission."

The commission will defend itself in court, an EU spokesman said.

The landscape has changed since the commission's 2013 decision, and any renewed attempt at a merger between UPS and TNT looks unlikely.

After UPS called off its merger in mid-January 2013 following stiff objections to the deal from the EU, logistics rival FedEx Corp. stepped in to acquire TNT in May 2016 for EUR4.4 billion, expanding its reach in Europe.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

February 26, 2018 06:43 ET (11:43 GMT)

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