The tradition of acquiring companies to expand market share doesn’t look to fade away any time sooner. Amongst many other companies, FedEx Corporation (NYSE:FDX) has also decided to take the acquisition way to move higher in the market. As per the reports, it would buy TNT Express NV for as much as 4.4 billion Euros or $4.8 billion.
What Prompted The Company To Do It:
As per the reports, FedEx thinks that the acquisition of TNT would succeed in the US market with the help of the company. Regulatory authorities banned the services of United Parcel Services a few years ago, but they have not yet given any comment on FedEx’s decision to acquire the company.
What’s In For TNT Shareholders:
FedEx has made sure that all the shareholders of TNT are given enough shares in this deal. As per the reports, all the investors of TNT will be given 8 Euros per share in the cash form. It’s 33% more than the price of company’s stocks at the end of April 2, 2015. Even though this offer sounds interesting, but it’s lesser than what UPS offered in 2012. According to reports, UPS came up with a huge per share price of 9.50 Euros.
The management of TNT looks forward to executing this deal in an effective way. The deal comprises of a few synergies for FedEx Corporation (NYSE:FDX). The prevailing market situations are excellent for this type of transaction. The price of Euro and dollar is in the perfect balance as of now, which has resulted in a financial gain for the company. According to FedEx representative, it’s a match in heaven kind of deal for the company, which is likely to affect it in the long run. It will not only enhance company’s revenues, but also its reach and popularity in the domestic and international market.