The European Commission announced, in a press release published in Street Insider, that they are opening an "in-depth investigation" into the FedEx Corporation's acquisition of TNT Express.
The acquisition will be assessed to see if it is in line with the EU Merger Regulation.
The Commission is concerned that the acquisition will affect the competitive balance of the industry in the European market, according to the press release.
Both companies are considered as global players in the small package delivery sector
"The merged entity would face insufficient competitive constraints from the only two remaining players (UPS and DHL)," according to the press release. "This could lead to higher prices for business customers and consumers."
Bloomberg adds that the $4.8 billion deal would give FedEx access to TNT's vehicles, staff and customers, allowing it to cut costs while it expands its market.
The acquisition will also help FedEx compete with UPS and DHL. FedEx is currently ranked fourth among companies that offer small package delivery service in the European market.
Mergrethe Vestager, the commissioner who is in charge of competition policy, said in the press release that the Commission should make sure that FedEx's acquisition of TNT would not "impede effective competition" and would not result in "higher prices for consumers."
"Many businesses, and in particular e-commerce, rely heavily on affordable and reliable small package delivery services, and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought," she said.
Bloomberg adds that Patrick Fitzgerald, a spokesman for FedEx, said in a statement that FedEx and TNT will work to meet the Commission's "need for additional due diligence."
He also said that the merger of the two companies will benefit customers and increase competition.
The Commission has 90 working days, or until December 8, 2015, to investigate the acquisition and determine whether their concerns are founded, according to the press release.
