UPS to Acquire Overnite Corp. for $1.25 Billion

PS Inc. said Monday it had reached agreement to acquire less-than-truckload carrier Overnite Corp. for $43.25 per share, or about $1.25 billion.

UPS said the deal would allow it to expand its services by offering a variety of truckload and less-than-truckload services to its North American customers. It also will immediately position UPS as a top U.S. LTL carrier, the company said.

The move comes five months after UPS expanded its air freight services by acquiring Menlo Worldwide Forwarding.

Overnite serves more than 60,000 customers in the LTL and TL segments with operations in the U.S., Canada, Mexico, Puerto Rico, Guam and the U.S. Virgin Islands, UPS said in its statement.

UPS is ranked No. 1 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers. Overnite is No. 17.

UPS's drivers and many of its other workers are members of the Teamsters' union, while Overnite's company drivers are non-union.

Teamsters President James Hoffa said Monday that UPS "informed the union that Overnite will operate separately from UPS's package-delivery operations and that the purchase will not affect any Teamster jobs."

He said the union would "carefully evaluate the deal and make sure that every Teamster job is protected."

UPS said the acquisition, which it expects to complete in the third quarter, is an all-cash transaction that will require regulatory approvals and the approval of Overnite's shareholders.

“Overnite is a successful, well-run company with excellent growth prospects and has a strong culture and world-class employee base that complement our organization,” UPS Inc. Chief Executive Officer Mike Eskew said in a statement.

UPS said Overnite's management team is expected to remain in place to run the business. Overnite’s Web site had posted no information about the deal as of early Monday morning.