United Parcel Service will pay 5.2 billion euros (4.31 billion pounds) for Dutch peer TNT in a deal that will make the U.S. company the biggest package-shipper in Europe with 45 billion euros in global sales.
TNT said on Monday its executive and supervisory boards unanimously supported UPS's offer of 9.50 euros per share, up from an initial 9 euros per share last month.
TNT's biggest shareholder PostNL, which owns 29.8 percent, also said it backed the offer, which UPS said it would finance through a combination of available cash and new debt.
The deal allows UPS to take out a European rival that has shown a willingness to undercut competitors on price and gain a stronger position in growth markets Asia and Latin America.
The firms said in a joint statement that the raised offer is a 53.7 percent premium over TNT's closing price the day before the companies announced they were in talks.
UPS, the world's largest package delivery company, has long looked at TNT as a way to help it expand in Europe, especially Britain, France and Germany as well as in the Netherlands.
The offer ends years of speculation about the future of the Dutch delivery company, which was split from the Dutch mail company PostNL and listed last year.
With falling profit and a poor outlook for 2012, TNT's management had come under intense pressure from activist shareholders, including Jana Partners and Alberta Investment Management Corp., to seek a buyer.
UPS said the acquisition will accelerate its global growth strategy by increasing foreign revenue from 26 percent to 36 percent of the group total.
The deal will bring annual cost synergies of approximately €400 to €550 million by the end of 2012 when it is due to close, UPS said. It will first spend a pre-tax, 1.3 billion euros on implementation costs to achieve those synergies, it said.
If a third party makes a binding counter offer exceeding the UPS bid by eight percent, TNT or UPS can terminate the transaction, the companies said in a statement. That leaves the door open for another rival, such as FedEX, to bid, but analysts have said that is unlikely.
About two-thirds of TNT's revenue is from European customers, but it also has been steadily growing in China, India, as well as Brazil where it has struggled to integrate its acquisitions.
On Friday, UPS said it was still in constructive talks with TNT, four weeks after the Dutch firm rejected UPS's 9 euro per share bid, or a 42 percent premium on the day, valuing TNT at 4.9 billion.
($1 = 0.7592 euros)
(Reporting by Roberta B. Cowan; editing by Elizabeth Piper/Anna Willard)