Shipping giant spins off FedEx Freight into ‘North America’s largest LTL carrier’
FedEx announced the spin-off of the FedEx Freight division into an independent and publicly-traded separate entity.
On Monday, June 1, shipping giant FedEx announced the completion of the spin-off of the FedEx Freight Holding Company, Inc. into “an independent, publicly traded company and focused leader in the North American less-than-truckload (LTL) industry.”
The move makes FedEx Freight “North America’s largest LTL carrier,” the company said.
“Today begins the next chapter for the new FedEx Freight,” said John Smith, FedEx Freight president and chief executive officer. “We move forward as an independent company with a sharpened focus and disciplined strategy to build on our competitive advantages and accelerate profitable growth. As the largest pure-play LTL carrier in North America, we will leverage our comprehensive network with more than 26,000 service center doors to deliver cost and service advantages to our customers and capitalize on growth opportunities in high-potential verticals. With our safety above all culture and a world-class team, FedEx Freight is well positioned to unlock our full potential and deliver long-term stockholder value.”
FedEx Freight operates 30,000 vehicles, including nearly 17,000 tractors, and employs 40,000 people.
FedEx announced intentions to spin off FedEx Freight in December 2024, with an expectation that it would take 18 months to complete the process.
When the split was announced, the company said that the separation of the two entities was meant to maintain “operational synergies between both companies” while promoting “greater strategic, operational and financial execution for each company and its stakeholders.”
FedEx distributed 80.1% of the outstanding shares of FedEx Freight’s common stock on a pro rata basis to the holders of FedEx common stock.
The company retained 19.9% of the outstanding shares of FedEx Freight common stock, which will be disposed of within 24 months of the completion of the separation through one or more subsequent exchanges in repayment of certain FedEx debt held by FedEx creditors and/or through distributions to stockholders of FedEx as dividends or in exchange for outstanding shares of FedEx common stock.
“The successful separation of FedEx Freight is a pivotal milestone, positioning two independent companies to lead their respective industries and create long-term value for their stockholders,” said Raj Subramaniam, FedEx president and chief executive officer. “Today’s spin-off positions FedEx Freight to build on its market-leading scale and a customer-focused culture, and advances the next chapter for FedEx as the industrial network that helps power the global economy.”