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UPS plans to buy Overnite for $1.25 billion
By Jill Dunn
UPS plans to buy Overnite Corp. for $1.25 billion, which will allow the world’s largest package delivery company to offer a variety of less-than-truckload and truckload services.
The all-cash transaction, expected to close during the third quarter of this year, must be approved by regulators and Overnite’s shareholders. Overnite’s board has unanimously approved the agreement and recommended it for stockholder approval.
Mike Eskew, UPS chairman and CEO, called acquiring the Virginia-based company that did $1.65 billion in revenue last year “perfect strategy.”
"We want to offer our customers the broadest portfolio of transportation and logistics services available from a single source, and this is an important capability that we needed to have,” Eskew said.
Overnite’s share increased 43 percent May 16 after the agreement was announced earlier that day. The 70-year-old mostly LTL carrier expanded its air freight business five months ago by buying Menlo Worldwide Forwarding.
Atlanta-based UPS is the single largest employer in the Teamsters union. Non-union Overnite was the target of a three-year Teamsters strike that ended October 2002.
Union Pacific Corp. bought Overnite in 1986 but divested its interest in 2003. The company serves North America, Puerto Rico and the U.S. Virgin Islands.
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