Transportation Sector Review: UPS Merger Protocol

United Parcel Service (NYSE:UPS): UPS (NYSE:UPS) says the Merger Protocol contains certain termination rights for the Company and TNT Express (TNTEY). Upon termination of the Merger Protocol by the Company, in the event of certain breaches by TNT Express or by either the Company or TNT Express, in the event that a bona fide third-party offeror makes an offer which is binding upon such party, exceeds the Offer price by at least 8% and is considered by the Executive and Supervisory boards of TNT Express to be substantially more beneficial to TNT Express, TNT Express will pay the Company a EUR500M termination fee. The Merger Protocol also provides that the Company will be required to pay TNT Express a reverse termination fee of EUR200M in the event of termination of the Merger Protocol due to the Company’s failure to consummate the Offer, certain breaches by the Company, or the failure to obtain certain regulatory approvals. In addition, subject to certain limitations, either party may terminate the Merger Protocol if the Offer is not consummated by February 28, 2013.

The shares closed at $79.71, down $0.57, or 0.71%, on the day. Its market capitalization is $76.41 billion.

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