The United Parcel Service, Inc. (NYSE:UPS) is continuing its quest to acquire the Dutch company TNT (AMS:TNT) Express with continued talks. The company is valued at approximately 4.89 billion euros ($6.4 billion).
On Friday, UPS (NYSE:UPS) said in a statement that it was participating in “constructive discussions with TNT (AMS:TNT) Express regarding a potential transaction to acquire the entire issued share capital.”
According to AP, the company plans a formal bid for TNT by May 12.
This isn’t the first news of UPS (NYSE:UPS) pursuit of TNT (AMS:TNT). Its board made a statement back on Feb. 17 announcing that it had rejected UPS’s offer but it would continuing negotiating with them. Under Dutch law, U.P.S. had a four week deadline after they contacted TNT (AMS:TNT) to “clarify its intentions” reported The New York Times.
Talks have slowed in the last few weeks and The Wall Street Journal recently reported that it was due to “social issues.” This may encompass personnel decisions.
In addition, the two companies had held talks about three years ago, but after discussion, the potential deal didn’t happen.
So what’s the attraction for UPS to acquire TNT?
It would be the company’s biggest acquisition as its largest purchase has been the 2005 $1.2 billion takeover of Overnite Corporation.
TNT (AMS:TNT) shareholders should be happy about the acquisition as the company has struggled since its spin off last May from PostNL. It also hasn’t received any other bidders. TNT has faced a declining demand for its air shipping services during the economic slowdown and it is about to report a fourth quarter loss.