FedEx has stepped up to the challenge of rivals UPS by agreeing to buy Dutch package delivery company TNT Express for €4.4bn (£3.2bn, $4.8bn).

European regulators blocked a 2013 takeover of TNT by UPS due to concerns it would stifle competition, but analysts and executives said FedEx, with its strong air fleet, would complement TNT's sizeable European road network.

"In terms of FedEx, it significantly increases the reach of their European footprint. It's one of the reasons of course why FedEx is actually quite confident that unlike the UPS deal, this isn't likely to be blocked by Brussels. So it seems as though it's a win-win situation," said BGC Partners analyst Mike Ingram.

US-based FedEx is the latest company to seize on global, low interest rates -- financing the TNT acquisition by borrowing to pay for it all.

"And certainly, the weaker euro and on the flipside, the strong dollar, has meant that European targets are more attractive to US investors and I think that FedEx/TNT is a very clear example of that," he added.

"Europe, despite the fact that there has been low growth, is still an enormous market both for import and export," FedEx Chief Executive Fred Smith told analysts.

TNT gives FedEx access to pan-European services and the domestic UK and French markets, areas where it is not yet a big player, Smith said, while TNT customers will get access to FedEx's global distribution platform.

ING analysts estimate Deutsche Post's DHL currently has a 19 percent market share in Europe, followed by UPS with 16 percent, TNT with 12 percent and FedEx at 5 percent – meaning the deal could elevate FedEx up to second place.

The deal, which was unanimously recommended by TNT's supervisory board and is expected to close next year, saw the Dutch company's share price jump by more than 30 per cent in early trading in Europe.