8-KMaterial AgreementsRegulation FDExhibits & Filings

UNITED PARCEL SERVICE INC 8-K Report, Material Agreement (Mar 23, 2012)

Filed March 23, 2012For Securities:UPS

Summary

United Parcel Service, Inc. (UPS) has filed an 8-K report detailing a significant acquisition agreement with TNT Express N.V. On March 19, 2012, UPS announced a recommended all-cash public offer to acquire all outstanding ordinary shares of TNT Express for €5.16 billion ($6.77 billion), based on an exchange rate of $1.3116/€1. This strategic move aims to expand UPS's global reach, particularly in Europe and Asia, by integrating TNT Express's extensive network. The transaction is structured as a merger, with UPS intending to finance the acquisition through a combination of existing cash reserves and new debt arrangements. The agreement includes specific conditions for both the commencement and consummation of the offer, such as regulatory approvals, absence of material adverse effects, and a minimum acceptance threshold of 80% of TNT Express's shares. The filing also outlines termination clauses and associated fees, including a €50 million termination fee payable by TNT Express under certain circumstances and a €200 million reverse termination fee payable by UPS for specific breaches or failure to obtain regulatory approvals. A key element is the irrevocable undertaking from PostNL N.V., which holds approximately 29.8% of TNT Express shares, to tender its stake, significantly de-risking the offer acceptance.

Key Highlights

  • 1UPS announced a definitive agreement to acquire TNT Express N.V. for €5.16 billion ($6.77 billion) in an all-cash offer.
  • 2The acquisition is intended to expand UPS's global network, particularly in Europe and Asia.
  • 3The offer price is €9.50 per ordinary share, subject to adjustment for any dividends declared by TNT Express.
  • 4Financing for the acquisition will come from existing cash and new debt arrangements.
  • 5The deal is subject to customary closing conditions, including regulatory approvals and an 80% minimum acceptance rate.
  • 6PostNL N.V., holding approximately 29.8% of TNT Express shares, has provided an irrevocable undertaking to tender its shares, subject to certain conditions.
  • 7Termination fees are stipulated: €50 million payable by TNT Express and €200 million payable by UPS under specific circumstances.

Frequently Asked Questions

The primary strategic rationale for UPS acquiring TNT Express is to significantly enhance its global logistics network, particularly strengthening its presence and capabilities in European and Asian markets. The combination aims to create a more comprehensive and efficient delivery network for customers worldwide.

UPS intends to finance the acquisition of TNT Express through a combination of its existing cash on hand and new debt arrangements. The company plans to make a 'certain funds' announcement to confirm its ability to fund the transaction as required by Dutch takeover regulations.

The consummation of the offer is subject to several conditions, including obtaining necessary regulatory approvals (such as competition clearances), securing a minimum acceptance of 80% of TNT Express's ordinary shares on a fully diluted basis, the absence of any material adverse effects on either company, and the satisfaction or waiver of other customary closing conditions outlined in the merger protocol.

PostNL N.V. is a major shareholder in TNT Express, holding approximately 29.8% of its outstanding ordinary shares. Their irrevocable undertaking to accept UPS's offer significantly de-risks the transaction by ensuring a substantial portion of the shares will be tendered, making the 80% minimum acceptance threshold more achievable.