The European Commission on Friday announced an in-depth inquiry into a proposed 5.16 billion euro acquisition of Dutch shipper TNT Express by United Parcel Service, both major players in small package delivery.
"The small package delivery sector is of strategic importance for various other industries in Europe," said Europe's competition commission Joaquin Almunia.
"The proposed acquisition could in particular reduce competition for the provision of the fastest express delivery services, to the detriment of direct customers and ultimately of European customers," he added in a statement.
UPS and TNT Express are two of four firms that control a comprehensive air and road small package delivery network -- currently operating in Europe. Others present in Europe are DHL, owned by Deutsche Post, and FedEx, a US-based company.
The Commission said that the proposed merger would therefore reduce the number of so-called integrators from four to three and lead to a highly concentrated market for domestic and international express delivery services.
"The Commission will now investigate the proposed merger in-depth to determine whether these initial concerns are confirmed or not," a statement said.