UPDATE 1-EU to object to UPS bid for TNT -source

(Adds source, analyst, details)

By Gilbert Kreijger and Foo Yun Chee

AMSTERDAM/BRUSSELS, Oct 10 (Reuters) - EU antitrustregulators will next week tell United Parcel Service Incthat its bid for TNT Express is anti-competitive, aperson close to the matter said on Wednesday, ratcheting uppressure on the U.S. company to offer concessions.

The European Commission, which is now examining the5.2-billion-euro ($257.92 million) deal, will set out itsconcerns at a meeting with UPS officials before sending astatement of objections or charge sheet, the person said.

The person said UPS has not offered any concessions to date,preferring to wait until the EU watchdog details its concerns.

Shares in Dutch delivery group TNT Express weredown 0.8 percent to 8 euros by 0900 GMT after falling as much as2.5 percent in early trade. The Financial Times newspaper had onWednesday reported that the EU watchdog would object to thedeal.

TNT Express shares have been trading below 9 euros since theend of July versus UPS's bid of 9.50 euros per share.

UPS may find it difficult to come up with concessions tosooth regulatory concerns about the deal, the biggest in its105-year history, said Andre Mulder, analyst with brokerageKepler.

"We think the likelihood of the takeover being canceled hasincreased a bit further," he wrote in a note.

The Commission is worried that the proposed merger willreduce the number of players, leaving the combined entity tocompete with only Deutsche Post's DHL and U.S. peerFedEx .

UPS is arguing that it faces competition from nationalpostal companies such as French mail company DPD and RoyalMail's European express parcel service GLS, as well asfreight forwarders like Swiss companies Kuehne & Nageland Panalpina .

($1 = 0.7754 euros)

(Reporting by Gilbert Kreijger and Foo Yun Chee; Editing byAlison Birrane and Hans-Juergen Peters)


Messaging: gilbert.kreijger.reuters.com@reuters.net))