A favorable dollar exchange rate against the euro, an ongoing stimulus program in Europe and low oil prices converged to make multibillion-dollar deal between FedEx Corp. and Dutch rival TNT Express possible, Fred Smith said on Tuesday.
"We thought that the planets lined up perfectly for this move," the FedEx CEO and chairman said on CNBC's "Squawk on the Street."
FedEx announced on Tuesday that it had agreed to take over TNT Express, one of Europe's largest delivery companies, for 4.4 billion euros ($4.8 billion) in a move that FedEx said would strengthen its business globally.
FedEx has reached a conditional agreement with TNT Express' management on an all-cash offer of eight euros ($8.75) for each TNT Express share. That represents a premium of 33 percent over the share's April 2 closing price, the companies said.
The companies said the deal is expected to close in the first half of 2016, pending shareholder approval. Dutch postal company PostNL, which owns a 14.7 percent stake in TNT Express, said it supports the bid.
The deal reflects FedEx's view that the world economy is in a better place today than it was six months ago, Smith told CNBC.
"You're going to see the benefits of lower oil prices throughout the global economy. It takes a little while for that to result in increased purchasing activities both in the United States and Europe," he said.
The planned takeover comes two years after UPS dropped a 5.2 billion-euro (almost $7 billion) takeover bid for TNT Express, citing objections by European Union regulators.