TNT to sell airline operations to ASL
TNT Express has agreed to sell its airline operations to Dublin-based ASL Aviation in an effort to safeguard a deal to combine with United Parcel Service.
The transaction is conditional on the completion of UPS’s proposed €5.16 billion purchase of TNT, the company said today in a statement. Financial terms were not disclosed.
TNT stock has been trading at a discount to UPS's €9.50-a-share offer price as investor scepticism of the deal grows.
Since announcing the purchase on March 19, Atlanta-based UPS has twice pushed back the target date to complete the biggest acquisition in its 105-year history as the regulatory review continues.
"This is an important step towards completion of the proposed UPS-TNT Express merger and a positive outcome for the airline employees," Bernard Bot, interim chief executive officer of TNT Express, said in the statement.
TNT will sell 100 per cent of TNT Airways and Pan Air Lineas Areas to ASL, which operates 90 aircraft offering freight and passenger services, the company said.
"This change of ownership and control will ensure service continuity of the TNT Express operations after the completion of the proposed merger," the company said today in the statement on its website.
TNT stock jumped as much as 4 per cent, the most since it announced it was in takeover talks with UPS in February, and was trading 1.5 per cent higher at €7.07 as of 9.33am in Amsterdam. That values the company at €3.8 billion.
The future of TNT’s air operations had been called into question by the deal since companies from outside the European Union may not hold stakes above 49 per cent in airlines.
"It is definitely a short-term positive," Zurich-based Credit Agricole analyst Beat Keiser, who rates TNT Express underperform, said by telephone.
"It will be business as usual, because of the guarantee they've given. There were probably a few interested parties, but that they've found a buyer is positive."