Business | Shipping
UPS douses talks of TNT takeover
Top global logistics firm United Parcel Service, playing down talk it will pay more than $15 billion for all or part of TNT, said buying the smaller rival would devalue its own shares and called such takeover speculation a "rumour".
- Reuters
- Published: 23:22 August 11, 2008
Beijing: Top global logistics firm United Parcel Service, playing down talk it will pay more than $15 billion for all or part of TNT, said buying the smaller rival would devalue its own shares and called such takeover speculation a "rumour".
Shares in No 2 European logistics firm TNT -which leapt 6.5 per cent yesterday after the Sunday Telegraph reported UPS intended a 10 billion euro ($15.2 billion) bid - did an abrupt about-face and slid 10 per cent after the comment.
"That rumour again?" Dan Brutto, president of the company's international business, said in an interview yesterday.
"I look at that (TNT share price) and said, 'someone says we're going to buy something that devalues our shares too at the same time," he told Reuters, adding however that acquisitions were not something he oversaw directly.
"But we always look at different things and try to fit (them) into the puzzle."
UPS, a bellwether of the US economy along with rival FedEx Corp, last month posted earnings in line with expectations but hit by rising fuel costs and a weak economy.
Trying to drive growth beyond a US market that accounts for more than half its revenue, UPS will be opening two $180 million transport hubs in China.
And it wants to nearly quadruple its staffing there in the next few years, hoping to serve growing demand for delivery services within a relatively untapped market.
"US consumers are not buying, but I think the great opportunity for us internationally is business that never touches US shores," said Brutto, who was in Beijing to attend the 2008 Olympics, with UPS a sponsor.
UPS has doubled its headcount in China over the past 18 months to around 5,300, but expects that number to increase by at least 1,000 annually over the next 3-4 years, said Brutto.
It's now looking for acquisitions within the world's fourth largest economy, despite fears that Chinese growth will taper off over 2008 and 2009.
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