FedEx Corp. has announced its intention to spin off its FedEx Freight unit into a separate company, creating the largest publicly traded less-than-truckload carrier in North America. The decision was made after an assessment of the role FedEx Freight plays in the company’s broader portfolio.
The separation is expected to preserve operational synergies between both companies while enabling greater strategic, operational and financial execution for each company. FedEx Freight will become a separate, independent publicly traded company that continues to operate under the FedEx Freight name.
The spinoff process is expected to be completed within 18 months, subject to regulatory conditions and final approval from the board of directors. FedEx Freight has seen significant revenue growth, with operating profit increasing by nearly 25% on average per year over the past five years.
The separation will allow for more customized operational execution, tailored investment and capital allocation strategies, and enhance the value proposition for each company. FedEx expects to maintain strategic advantages in key commercial, operational, and technology initiatives while optimizing benefits from existing relationships.
FedEx CEO Raj Subramaniam stated that the announcement is a testament to the strength of the business and dedication to customers, team members, and stockholders. The separation will unlock value for its Freight business and position FedEx to create greater value for shareholders.
Source: https://www.ttnews.com/articles/fedex-spin-off-freight-unit