UPS United Parcel Service

FedEx Corp. said Tuesday it had been informed that it won't be challenged by European regulators in its acquisition of Dutch parcel firm TNT Express NV, clearing one of the biggest hurdles in the nearly $5 billion deal.

While the companies still must receive approvals from regulators in other countries, the news was an unexpectedly easy pass from Europe's antitrust cops, which blocked a similar deal between rival United Parcel Service Inc. and TNT in 2013.

EU regulators opened a full-blown investigation into the deal in July, warning that the merged company could face "insufficient competitive constraints" in a number of European markets. They also said they were examining how the merger could affect delivery routes out of Europe.

"FedEx and TNT have been informed by the European Commission that no statement of objections will be issued," the companies said in a release. The transaction is still expected to close in the first half of next year.

While executives at both companies have maintained the deal is substantially different than Atlanta-based UPS's attempt because FedEx's current operations in Europe are much smaller than UPS's were, analysts and people close to the deal had largely expected EU regulators to take a tougher stance—at least for appearance' sake.

While it is surprising the regulators didn't put up more of a fight, European approval was the first hurdle, and remaining regulatory approvals should now follow, said David Vernon, a transportation analyst with Sanford C. Bernstein & Co.

"The fact that the deal will get done is in line with our expectations and we think most investors in FedEx were expecting approval," Mr. Vernon said. He said that increasing the company's business in Europe should eventually help make the company's Express business more stable and less susceptible to cyclical changes.

A FedEx spokeswoman said the Memphis-based company is making timely progress on the necessary regulatory steps around the world.

TNT stock closed up 10% at €7.55 ($8.55) after languishing about 15% under FedEx's offer price of €8 per share in recent weeks as investors worried about a potential EU rebuttal. FedEx closed up 1% at $154.

The deal, announced in April, would allow FedEx to acquire an extensive ground network in Europe, making it a bigger player in the burgeoning e-commerce market with an established door-to-door road network in the region that connects more than 40 countries. The acquisition would bring FedEx about 58,000 employees, 19 road hubs and 550 depots to its portfolio. It would become the third-largest player in Europe's international express-delivery market, behind DHL and UPS.

"I think it is great for FedEx and TNT, great for European shippers, and the EU got it right," said Rob Martinez, chief executive of shipping consultant Shipware LLC, in an email. "The acquisition makes strategic sense for FedEx to immediately grow its European capabilities, distribution footprint and market share."

Until now, FedEx has largely had only limited options for shipping within Europe, instead focusing its energy on international delivery services, analysts say. Combining the two networks will make it a major competitor overnight, with very little overlap in operations.

"Even when you put FedEx and TNT together, it is still a pretty competitive market, and it makes a stronger competitor," said Ivan Hofmann, principal at ETC & Associates and former executive vice president and chief operating officer at FedEx Ground.

EU regulators care strongly about jobs, he said. UPS and TNT had significantly more overlap and would have cost too many. "Right now they're probably breaking out the champagne in Memphis, and in Atlanta they're probably disappointed," he added.

A UPS spokesman said in a statement that the company is awaiting the commission's official ruling "and looks forward to reviewing the official decision once it is made public by competition authorities."

The delivery giant has previously said it would accelerate its growth strategy to invest more than $2 billion in Europe over five years.

"UPS customers will be able to rely upon the same high levels of service across our global network even as we continue to expand and upgrade our capabilities," the spokesman added.

UPS's acquisition attempt was derailed in part by its inability to find a large enough purchaser for assets the European Commission mandated it shed. At the time, UPS revised its €5.2 billion proposal, then valued at nearly $7 billion, three times but failed to satisfy the EU's concerns. UPS is appealing that decision, with a court hearing expected by year's end. If UPS were to win, it could bid again if the FedEx deal has yet to go through, although analysts say this scenario is highly unlikely.

Separately Tuesday, FedEx received additional good news as it found out that its pilots voted in favor of a new six-year contract agreement. Following years of negotiations, the Air Line Pilots Association said the new agreement includes higher hourly wages, new-hire compensation, a "significant" signing bonus, retirement plan enhancements and work-rule improvements.

The agreement comes before the all-important peak holiday season arrives for the delivery company

Tom Fairless in Brussels contributed to this article

Write to Laura Stevens at laura.stevens@wsj.com

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(END) Dow Jones Newswires

October 20, 2015 18:25 ET (22:25 GMT)

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