United Parcel Service (NYSE: UPS) recently agreed to acquire TNT Express, a Dutch package delivery company, in a deal worth $6.8 billion, which translates to $12.50 per share.

Earlier, UPS had offered $11.80 per share to TNT, a whopping 42% premium on the current market value prevailing at that time, only to be turned down. However, UPS chose to sweeten the deal for more reasons than one. Here's a look at what may have prompted UPS to continue courting its competitor.

Why UPS pursued TNT
TNT has operations spread across Europe, with a major presence in countries such as Britain, France, Germany, and the Netherlands. The European region accounts for a hefty two-thirds of the company's revenue. Given that the European economic uncertainty is unlikely to last long, this seems to be a good time to invest in the region. TNT holds a 9.6% share in the European express delivery market, which UPS aims to pocket with this acquisition.

And if that's not enough, a significant portion of TNT's top line is also derived from fast-growing markets such as China and Brazil. UPS can now definitely look forward to gaining a strong foothold in these Asian and Latin American markets.

TNT gains, too
TNT recently posted disappointing fourth-quarter results, a fact that made the UPS offer seem even more lucrative. TNT incurred a loss of $229 million for the quarter, largely because of one-time impairment charges related to its Brazilian business and airplane fleet.

And that may not have been the only reason that TNT finally succumbed to UPS's charms. Since its split from PostNL in May last year, TNT's shares have slipped 38% due to continued poor performance in the second and third quarters. The company also experienced low profitability in Asia and Latin America. TNT had been actively looking for partners, lest it be forced to spin off its businesses in China and Brazil to focus on its core (European) division. The company's investors longed for something that might uplift its prospects -- and in rode UPS on a white steed.

What's in the deal for UPS
Even at a significant premium, TNT will provide UPS with the much-needed competitive advantage over peers DHL and global competitor FedEx (NYSE: FDX). The acquisition will increase UPS's share of European express deliveries to around 17.3% from the current 7.7%, according to data from the research organization Transport Intelligence. This will also bring it closer to Deutsche Post's DHL unit, which holds 17.6% market share, and leave FedEx with a measly 3.3% share in the European region. I'm guessing FedEx is keeping a close watch, or else it may be marginalized into third place in the race for European dominance.

The Foolish bottom line
TNT's significant market share in the European region, along with China and Brazil, should work in favor of UPS. What remains to be seen is how well UPS deals with the difficulties faced by TNT in the markets acquired.

For some time, UPS has had its eye on TNT as a potential acquisition to help it explore more international markets. If you're interested in other companies making headway in foreign countries, download our free report: "3 American Companies Set to Dominate the World." The report won't be available forever, so we invite you to click here to get your copy today!