The newly created entity will be a giant with annual sales of EUR45 billion, according to Reuters.
On the local market, this deal might create the new leader in its line of business, with more than EUR50 million in sales.
The global deal will enable UPS to consolidate its position in Europe, especially in France, Germany, the Netherlands and the United Kingdom.
Whereas UPS is the largest international package delivery company, it posted EUR18 million in sales in Romania in 2010, ranking fifth among the competitors on the local market after FAN Courier, DHL- held by Deutsche Post, TNT and Cargus. Even though it posted the highest sales two years ago, FAN Courier does not have international operations.
“It is too soon to talk about the decisions that will be made locally as a result of this deal. Once we get our instructions from our parent company I will be able to provide information,” Iulia Nartea, country manager of UPS Romania, which specializes in international deliveries, told ZF.
UPS currently operates a daily flight between Otopeni and its main European air hub in Cologne, Germany, as well as a Timisoara-Cologne flight.
It posted 885,000 lei (EUR202,000) in profit in 2010, when it had 118 employees, according to Finance Ministry data.
UPS, which delivers as many as 23 million packages in its busiest days, saw a 15% increase in the volume of shipments abroad from Romania in the first three quarters of last year, compared with the same interval in 2010. The average growth in other countries in Europe stood at 9%.
The bulk of the parcels sent by Romanian customers go to destinations in the European Union.
In Romania, UPS competes with DHL, Pegasus (DPD), TCE Logistica and FAN Courier, the market leader. The Romanian courier market is estimated at EUR200 million.
TNT is the third leading player on the courier service market regarding 2010 sales after Romanian-held FAN Courier and DHL, held by Deutsche Post. It posted EUR34 million sales and EUR1.6 million profit, according to Finance Ministry data.
Bogdan Enache, general manager of TNT Romania, said he could not provide any comment on the steps to be taken on the local market for the time being.
Competition on the international shipping market will become fiercer after this deal. The 2010 data show DHL to have been in the lead. About 90% of the revenue of this company comes from deliveries abroad. In 2008, DHL bought local courier company Cargus. The same year also saw takeovers of Pegasus by GeoPost, a subsidiary of the French Post, and of Trans Courier Service by US-held giant UPS.
The only independent domestic courier company is FAN Courier, whose sales stand at EUR40 million. It is owned by brothers Adrian and Neculai Mihai and by Felix Patrascanu.
Adrian Mihai says the deal will lead to consolidation and implicitly to fierce competition on the international delivery segment.
“FAN Courier operates on the domestic delivery segment, only 1% [of our business] comes from international deliveries. We will just be spectators to what happens after this UPS-TNT deal, as it does not affect us,” Adrian Mihai said. (EUR1=RON4.3794)
(English version by Loredana Fratila-Cristescu)