UPS scrapped plans to grow in Europe through the acquisition of Dutch delivery company TNT Express because European regulators were getting ready to reject the $6.9 billion deal.
It would have been the largest acquisition in UPS history.
UPS had offered in March to buy TNT, Europe's second-largest delivery company, to better compete with Europe's largest, Deutsche Post's DHL. Regulators objected, saying the deal would reduce competition in the market for express delivery of small packages in Europe. UPS said Monday that it had proposed "tangible remedies," but after meeting with regulators on Jan. 11, the Atlanta company told TNT it saw no prospect of the deal being approved.
UPS CEO Scott Davis said in a statement Monday that he was "extremely disappointed" with the stance taken by regulators. Shares of United Parcel Service Inc., the world's largest package delivery company, rose 1.7 percent to close at $79.24 Monday.
Analysts said UPS could still pursue smaller acquisitions and also might boost its dividend or take some other action to reward shareholders.
TNT shares plunged in Europe. Although it will receive a $265.5 million (€200 million) breakup fee from UPS, TNT faces an uncertain future on its own. The 42 percent drop in its share price wiped off nearly €2 billion from its market value.
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