USFreightways Corp. and Transport Corporation of America last week canceled a planned merger as falling stock prices reduced the value of the transaction.
US Freightways of Rosemont, Ill., offered to buy TCA, a truckload carrier based in Eagan, Minn., for about 3.4 million shares of stock valued at $144.3 million on Jan. 18 (1-24, p. 1). Since then, the price of USFreightways stock has fallen by about $4 a share, reducing the value of the transaction by about $12 million.
Neither company would give a specific reason for terminating the deal. However, industry analysts said the decline in USFreightways’ stock price was a factor.
The purchase would have significantly boosted the truckload operations of USFreightways, which derives 80% of its business from a group of regional less-than-truckload carriers. In recent years, the company has tried to expand its transportation services by acquiring domestic and international freight forwarding companies as well as expanding its distribution and logistics services to provide one-stop shopping for freight shippers.
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