FEDEX BUYS AMERICAN FREIGHTWAYS
FedEx Corp. has agreed to acquire regional trucker American Freightways Corp. for about $1.2 billion in cash, stock and debt.
The acquisition will allow FedEx to expand its U.S. next-day, less-than-truckload services into the Midwest, South and Northeast, where American Freightways is strong. Viking Freight, FedEx's existing LTL subsidiary, operates mostly in West.
FedEx said that Viking and American Freightways together would create the second largest regional LTL freight unit in the U.S., with revenues of more than $1.6 billion. Industry experts predict that the regional LTL market will grow by almost 10 percent per year between 2000 and 2004, FedEx said.
FedEx agreed to pay slightly more than $28 per share for American Freightways — a 60 percent premium — and to take on $250 million in debt.
FedEx recently launched a home delivery unit within its FedEx Ground subsidiary, formerly RPS, and wants to compete more aggressively with United Parcel Service Inc. in the U.S. trucking market. UPS dominates the U.S. ground delivery industry and has been gaining share in the overnight air delivery segment ” FedEx's core business.
