FedEx said that it has reached a conditional agreement to acquire package delivery company TNT Express of The Netherlands for $4.8 billion, a purchase that would give the U.S. company a much stronger presence in Europe. The proposed transaction calls for a divestment in TNT’s air carrier operations.

The deal comes as Europe’s air cargo market continues to stagnate even as the world’s air freight segment continues on an upward trajectory since early 2013. This past February Europe saw a year-over-year increase in freight ton miles of only 1.1 percent, compared with 11.7 percent increase in global traffic. Although the International Air Transport Association attributed much of the global improvement to demand associated with the Lunar New Year, the effects of Russian sanctions and the European recession continued to weigh on the region’s performance while markets such as North America and the Middle East enjoy a healthy rebound.

In a joint press release on April 7, FedEx and TNT Express said the transaction will promote competition in Europe to the benefit of customers, adding a third major player to the express delivery marketplace with UPS and DHL. TNT currently holds the largest share (about 17 percent) of the €20 billion ($22 billion) intra-Europe business-to-business express market, according to Morningstar analyst Matthew Young.

Previously, UPS sought to purchase TNT but withdrew its offer in January 2013 after the European Commission issued a decision prohibiting the acquisition over competition concerns. At a press conference in Amsterdam, executives said they are confident that European regulatory officials will approve the FedEx acquisition, which they expect will close in the first half of 2016.

“This offer comes at a time of important transformations within TNT Express, and we were fully geared to executing our stand-alone strategy,” stated Tex Gunning, TNT Express CEO. “But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders.”

The transaction will require FedEx to divest TNT’s aircraft fleet, consisting of long-haul Boeing 777, 747-400, 757-PCF and 737 cargo planes and short-haul BAe 146-200 and -300 jets. The Dutch company reports operating 54 total aircraft. “The law is very clear. We are not allowed to own the airline,” a FedEx executive told reporters in Amsterdam. “We have identified some candidates and we’re going to start talking to them shortly.” Where permitted, however, FedEx said that it intends to transition TNT’s intercontinental air operations to its own.

The European regional headquarters of the combined companies would remain in Hoofddorp, outside of Amsterdam, and TNT’s hub in Liege, Belgium, would be maintained as a significant operation. The companies said they will “cooperate to avoid any significant redundancies in the global or Dutch work forces.” TNT has 58,000 employees.