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UPS Announces Withdrawal of Offer for TNT Express
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<blockquote data-quote="worldwide" data-source="post: 1087357" data-attributes="member: 2193"><p>By no means am I an expert on this but after looking around online, "reverse termination fees" are pretty common in these types of deals. Based on what UPS paid and the size of the deal, the fee was small compared to most of the examples below. I've got to beleive that UPS did their due dilligence and this contract language was a required part of the deal - after all, TNT had to essentially cease any new programs and expansion they were planning while this deal was going down for the past year. They are now in a much weaker position than they were before the proposed merger. I've got to beleive that UPS had full access to their books and now has very extensive knowledge of their operations, their customers and other critical data that can be helpful down the road.</p><p></p><p>Thomson Reuters/FX Alliance ($622.9 million, with a 2.3% termination fee of $14.5 million) </p><p>DigitalGlobe/Geoeye ($466.6 million, with a 4.3% termination fee of $20.0 million) </p><p>Aetna/Coventry Health Care ($5.63 billion, with a 3.0% termination fee of $167.5 million) </p><p>McKesson/PSS World Medical ($1.46 billion, with a 3.4% termination fee of $50 million) </p><p></p><p>There were 62 deals with antitrust reverse termination fees over the period January 1, 2005, through November 30, 2012. These fees have a median of 3.9% and a mean of 5.6%. The higher mean is due to some large outliers, including:</p><p></p><p>Google/Motorola Mobility ($11.9 billion, with a 21% termination fee of $2.5 billion) </p><p>Smithfield Foods/Premium Standard Farms ($674 million, with a 14.8% termination fee of $100 million) </p><p>Monsanto/Delta and Pine ($1.5 billion, with a 39.8% termination fee of $600 million) </p><p>Seagate/Maxtor ($1.9 billion, with a 15.8% termination fee of $300 million) </p><p></p><p>With the disclosure by AT&T that the total outlay of the antitrust reverse termination fee it paid in its deal with T-Mobile was $4.2 billion (and not the $6.0 billion often reported), the termination fee as a percentage of the $39 billion deal was 10.8%.</p></blockquote><p></p>
[QUOTE="worldwide, post: 1087357, member: 2193"] By no means am I an expert on this but after looking around online, "reverse termination fees" are pretty common in these types of deals. Based on what UPS paid and the size of the deal, the fee was small compared to most of the examples below. I've got to beleive that UPS did their due dilligence and this contract language was a required part of the deal - after all, TNT had to essentially cease any new programs and expansion they were planning while this deal was going down for the past year. They are now in a much weaker position than they were before the proposed merger. I've got to beleive that UPS had full access to their books and now has very extensive knowledge of their operations, their customers and other critical data that can be helpful down the road. Thomson Reuters/FX Alliance ($622.9 million, with a 2.3% termination fee of $14.5 million) DigitalGlobe/Geoeye ($466.6 million, with a 4.3% termination fee of $20.0 million) Aetna/Coventry Health Care ($5.63 billion, with a 3.0% termination fee of $167.5 million) McKesson/PSS World Medical ($1.46 billion, with a 3.4% termination fee of $50 million) There were 62 deals with antitrust reverse termination fees over the period January 1, 2005, through November 30, 2012. These fees have a median of 3.9% and a mean of 5.6%. The higher mean is due to some large outliers, including: Google/Motorola Mobility ($11.9 billion, with a 21% termination fee of $2.5 billion) Smithfield Foods/Premium Standard Farms ($674 million, with a 14.8% termination fee of $100 million) Monsanto/Delta and Pine ($1.5 billion, with a 39.8% termination fee of $600 million) Seagate/Maxtor ($1.9 billion, with a 15.8% termination fee of $300 million) With the disclosure by AT&T that the total outlay of the antitrust reverse termination fee it paid in its deal with T-Mobile was $4.2 billion (and not the $6.0 billion often reported), the termination fee as a percentage of the $39 billion deal was 10.8%. [/QUOTE]
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