FedEx CEO On TNT Acquisition

FedEx Corporation FDX announced on Tuesday that it will be acquiring TNT Express NV – ADR TNTEY in a $4.8 billion deal.

Fred Smith, Fedex chairman and CEO, was on CNBC recently to discuss the terms and details of the acquisition.

Good Deal For Both Companies

"Well the UPS transaction was terminated, it was not approved by European competition authorities and the reasons for that is quite different in our case," Smith said. "We have looked very carefully at the market share number in each of the markets and we believe that we will meet the task for approval and remember this deal from FedEx's standpoint is not based on lots of redundancies to get the synergies."

He continued, "It's a synergy, combining networks for more productive operations particularly the pickup and delivery operations and broadening portfolio for increased volume share and so we think this is a very good deal for both companies, workforces as well as meeting the regulatory test."

Wouldn't Face Significant Regulatory Hurdles

Smith was asked why it will take a long time for the deal to be done and what kind of regulatory hurdles it can face. He replied, "Well it may well be time consuming which is what we put into the press release, which by the way was very long to meet Dutch law and I think that led some people to believe we have greater concerns in that regard than is actually the case."

"But the EU, the United States China and Brazil will all be involved in an oversight process on this transaction and we believe we will be successful in getting it approved in all of those venues," Smith concluded.