UPS – TNT Express vs. FedEx –TNT Express; A case study into the role of the European Commission and involved organizations during the UPS – TNT Express deal and the FedEx – TNT Express deal
Four years ago, world its largest package delivery organization UPS tried to acquire its believed competitor TNT Express. After long and heavy negotiations, UPS withdrew its offer because the European Commission did not approve the intended deal. While UPS was still awaiting its appeal against the decision of the European Commission, FedEx and TNT Express were combining their forces in the meanwhile. This case study is aimed at comparing the obstruction of the UPS – TNT Express deal with the approval of the FedEx – TNT Express deal by the European Commission, and to find strategies used by the involved organizations to influence the potential outcome of these decisions. Unlimited possibilities to merge and acquire would probably lead to a weakened competition. A regulative institution is necessary in the nonmarket environment to constrain and regularize behavior. Hence, national and international competition authorities are trying to maintain fair and effective competition by enforcing competition policies. To maintain fair and effective competition in the European Union, the European Commission needs to constantly monitor the internal market and should have the possibility to intervene when necessary. Part of most national and international competition policies is the obliged pre-notification of intended mergers and acquisitions. The European Commission uses six main steps in their analysis to reach a decision: (1) Defining the relevant markets; (2) Determining a possible dominant position on the market; (3) Identifying possible effects; (4) Checking for preservation of effective competition; (5) Checking for a failing firm defense; and (6) Judging if efficiencies will be created. During the entire merger control procedure, organizations are trying to influence the (decision by the) European Commission, by means of corporate political activities. These strategies will be primarily used to provide (countering) information or to withhold certain information. Remedies will be offered as well by organizations as attempt to eliminate the doubts as to the compatibility of the deal with the internal market. During the procedure, organizations can choose to use certain strategies that focus on compliance or can choose more recalcitrant strategies to rub the European Commission up the wrong way.
Faculteit der Managementwetenschappen