FedExis in preliminary talks to acquire TNT, its smaller Dutch rival, in a deal that would bolster the package-delivery company's parcel network throughout Europe.

A deepening economic downturn and mounting fuel costs have damped demand for package deliveries, triggering a sell-off in the shares of the world's largest couriers and helping to revive the on-again, off-again discussions on a potential FedEx-TNT tie-up first broached years ago.