(Adds UPS, Commission comments)
By Foo Yun Chee
BRUSSELS, March 7 An EU court agreed with United
Parcel Service on Tuesday that the EU had wrongly
blocked its takeover of Dutch peer TNT four years ago,
potentially allowing the world's largest package delivery
company to sue regulators for damages.
The European Commission rejected the 5.2 billion euro ($5.5
billion) deal in 2013, saying UPS had not offered sufficient
concessions to allay concerns that the deal would hurt
consumers. The deal would have expanded its presence in Asia and
While TNT has since been bought by FedEx in a 4.4
billion euro deal approved by the Commission last year, the
ruling by Europe's second-highest court could affect other
UPS subsequently challenged the EU decision at the
Luxembourg-based General Court. Judges annulled the EU decision
on Tuesday, citing a procedural irregularity.
The court said the Commission had infringed UPS's rights of
defence by using a different econometric model in its analysis
than that used in previous exchange of views and arguments.
"UPS might have been better able to defend itself if it had
at its disposal, before the adoption of the contested decision,
the final version of the econometric model chosen by the
Commission," it said.
While the ruling is not expected to have any impact on the
package delivery market, it shows that regulators have to
present and communicate their case clearly to merging companies,
said James Killick, a partner at law firm White & Case.
"I don't think you can undo the two mergers. You can't
rewrite history. The ruling shows, however, the importance of
due process especially in the merger process where time is
short," he said.
UPS could potentially now sue for damages, he added.
UPS said it was pleased with the court's reasoning.
"While the decision in UPS's favour makes a number of
points, the most significant of this decision is its impact in
helping to preserve a competitive environment in Europe by
clarifying the procedure and relevant criteria for merger
approval," it said.
The Commission said it was studying the judgment.
($1 = 0.9468 euros)
(Reporting by Foo Yun Chee; editing by Philip Blenkinsop and