FedEx to Pay $1.2 Billion For American Freightways
FedEx Corp.'s (FDX) $1.2 billion purchase of American Freightways (AFWY) will create a super-regional less-than-truckload carrier that both brings some consolidation to a sector of the industry and issues a fresh challenge to transportation powerhouse and rival United Parcel Service (UPS).
FedEx’s first foray into the LTL business was in 1997 with the acquisition of Caliber System. In that deal, Viking, a western regional LTL, was but a pleasant afterthought. The main prizes in that $2.4 billion acquisition were RPS, now FedEx Ground, and Roberts Express, now FedEx Custom Critical.
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The combination of American Freightways and Viking Freight — a FedEx subsidiary since 1997 — under one roof means the company will be able to offer its customers regional LTL service throughout 48 of the 50 states. The combination will be the third largest of its kind, trailing only Con-Way Transportation Services, a part of CNF Inc. (CNF), and USFreightways Corp. (USFC)
The deal — for cash, stock and the assumption of some AF debt — propels FedEx to the heights of the LTL trucking sector, an area to which the Memphis, Tenn.-based corporation is a relative newcomer.
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