updated - October 26, 2020 Monday EDT
XPO Logistics, Inc. has announced that it will be acquiring Con-way, Inc. for about $3 billion, including $290 million of net debt, according to a press release issued by XPO Logistics.
The acquisition enhances XPO Logistics' range of supply chain solutions.
By acquiring Con-way, XPO becomes the second largest less-than-truckload (LTL) provider in North America, according to the press release.
The company will be offering its best-in-class LTL services to its 16,000 customers in North America and to Con-way's 36,000 customers, the majority of which requires LTL transportation.
The acquisition also expands XPO Logistics' global contract logistics platform by 22 million square feet, making it a total of 151 million square feet, and adds a total of 160 facilities to the footprint, according to the press release.
Con-way's operations, which serve blue-chip customers, like high tech, healthcare, and logistics, complements XPO Logistics' own expertise in aerospace, retail, telecom, agriculture, chemicals and food and beverage.
Bradley Jacobs, chairman and CEO of XPO Logistics, said in the press release that the acquisition lets the company take advantage of the "$35 billion market" of LTL transportation in North America.
"Con-way is a premier platform that we will run with a fresh set of eyes as part of our broader offering," he said. "Importantly, we'll gain strategic ownership of assets that will benefit our company and our customers during periods of tight capacity."
Reuters reported that XPO Logistics is benefitting from a rise in the number of trucks available to transport goods.
The company, which acts as a broker between shippers and freight companies, is taking advantage of the widespread bottlenecks on rail networks.
In addition, the latest deal is part of the rapidly consolidating logistics industry, in which XPO Logistics is at the forefront, Reuters added.
The company recently acquired France's Norbert Dentressangle SA for $3.53 billion.
According to the report, the acquisition in April made XPO Logistics one of the world's top 10 logistics companies.
A week after the Norbert Dentressangle acquisition, XPO Logistics acquired Bridge Terminal Transport for $100 million to triple its drayage capacity, the ability to transport goods over short distances.
Under the terms of the agreement, XPO Logistics will launch a tender offer for all of Con-ways outstanding shares at a cash price of $47.60 for each share of Con-way's common stock, according to the press release.
This represents a 31.6 percent premium compared to the closing price of Con-way's stock on Sept. 8.
The transaction is expected to close in October 2015.
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