(CN) – The European General Court on Tuesday reversed a decision to deny the merger of UPS and TNT, finding regulators improperly relied on an economic analysis that wasn’t disclosed to UPS during the inquiry into the takeover.
In 2012, UPS notified the European Commission of its plans to acquire Netherlands-based TNT. The following year, the commission blocked the merger based on its findings that the takeover would have restricted competition on the small-packages express delivery market in 15 EU states – in many cases leaving consumers with only the choice of either UPS or Germany-based DHL to ship their packages.
UPS sued to annul the commission’s decision, and on Tuesday the European General Court held that the carrier’s right to defense in the merger inquiry had been breached by the commission’s reliance on economic analyses that hadn’t been finalized prior to the proceedings.
“It must be found that the applicant was deprived of information which, had it been communicated to the applicant in due time, could have allowed it to submit different results on the effects of the merger on prices, which might have given rise to a reassessment of the scope of the information taken into consideration by the commission and, accordingly, a reduction in the number of ‘significant impediment to effective competition’ states,” the Luxembourg-based court wrote in its 14-page opinion.
And while the court acknowledged that speed is of the essence in merger inquiries, it noted the commission had two months to tell UPS about the changes in the economic analysis and should have so UPS could counter the information.
The court declined to weigh in on UPS’ other arguments, and ordered the commission to pay the carrier’s legal fees.