Ten months ago, when United Parcel Service Inc. bid $6.8 billion for Dutch shipper TNT Express, it was optimistic about securing a major presence in the European market. Today, citing stiff opposition from European Commission regulators, UPS abandoned the bid. The company's chief executive, Scott Davis, explained that all the "significant and tangible remedies" proposed to make the deal easier to swallow had failed to convince EC antitrust officials that it would not threaten competition in the overnight parcel-delivery market. "We are extremely disappointed," he said. Not so shareholders. UPS shares popped nearly 2% at the open, bringing them within reach of the 52-week high they hit on March 19 last year, the day the company announced its TNT deal.Why the relief rally? UPS has to pay TNT a $266 million termination fee. But that's a drop in the bucket given the $6.8 billion of uncommitted cash it's now sitting on. That's money some shareholders no doubt hope will trickle down to them in the form of a fatter dividend.Meanwhile, several Wall Street analysts point out that their earnings estimates for UPS judiciously excluded future contributions from TNT. UPS still looks pretty solid: According to analysts surveyed by FactSet, UPS is expected to earn $4.59 a share in 2102, a 5.5% improvement on its 2011 results. Their projections for 2013, again excluding a TNT acquisition, push the full-year earnings estimate up to $5.12 a share.UPS's gains build on a broad increase in global commerce, most of it outside Europe. So while failing to grab a bigger share of the European market might disappoint Davis, it didn't shake Wall Street.But that leaves TNT in play, at least in theory. Possible takers? Apparently not. TNT shares took a 41% dive in Europe and FedEx Corp. , the other name surfacing in the speculation pool, is not likely to make a bid. FedEx executives made that clear last March, when the UPS-TNT deal was first announced. They've given no indication they've changed their minds, focusing instead on cost-cutting.Besides, FedEx plainly has stated its strategy in Europe hinges on organic growth and small, tightly focused acquisitions, not billion-dollar takeovers. After hitting the EC's regulatory wall, that's a strategy UPS is likely to embrace as well, and shareholders seem OK with that. GOD BLESS AMERICA!!GO UPS!!
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