Con-way Inc. (CNW) to be Acquired by XPO Logistics for $3 Billion

Shares of Con-way Inc. (CNW) were trading up +11.80 or +33.21 percent to $47.33 per share in Thursday’s premarket after news broke late yesterday that the company had entered into a definitive agreement to be acquired by XPO Logistics (XPO) for $3 billion. Con-way Inc. stock closed at $35.53 per share, down -0.65 or -1.8% in Wednesday’s regular trading session.

Ann Arbor, Michigan based Con-way Inc. is a Fortune 500 company involved in freight transport and logistics and the third largest transportation and logistics firm in the United States.
The company markets its services through its operating companies: Con-way Truckload, Conway Freight and Menlo Worldwide. The operating companies offer full truckload, less-than-truckload or LTL and multimodal freight transport, in addition to logistics, supply chain management and warehousing services. Con-way’s logistics network consists of 582 locations with about 30,000 employees servicing more than 36,000 customers.

Greenwich, Connecticut based XPO Logistics Inc. provides third party service of transportation logistics and air and ocean freight forwarding and is the largest provider of intermodal cross border services to Mexico. The company is the third largest freight brokerage firm in the nation and the largest last mile logistics provider for heavy merchandise and manager of expedited shipments.

Under the definitive agreement announced yesterday after the market close, XPO Logistics Inc. will purchase all outstanding shares of Con-way Inc. for $47.60 per share or approximately $3.0 billion including approximately $290 million in Con-way debt. The merger will create the second largest provider of LTL services in North America.

The deal will make XPO the second largest LTL provider in North America expanding the company’s global contract logistics platform. The combination of XPO and Con-way’s managed truckload, transportation and freight brokerage business will create significant synergies for the consolidated firm.

Douglas Stotlar, Con-way’s President and Chief Executive Officer said in the press release that, “This landmark transaction provides immediate cash value for our shareholders and reflects the outstanding contributions of our employees over our 86-year history. The combination will mean more services for our customers, more miles for our drivers, and more career opportunities for our employees as part of XPO's global organization. We look forward to working with the XPO team to complete the transaction and ensure a smooth transition.”

Following the tender offer for $47.60 per Con-way share, if successful, Con-way will merge with one of XPO’s subsidiaries and become a wholly owned subsidiary of XPO, with all remaining shares receiving the same consideration paid to shareholders that participated in the tender offer.

After the close of the transaction, Bradley Jacobs, XPO’s Chairman and Chief Executive will retain his positions while Con-way CEO Doug Stotlar will serve in a non-executive advisory capacity while the transaction is completed.

The transaction is expected to close by October of 2015 after the successful tender offer and is subject to the customary conditions which include regulatory approval. The boards of both companies have unanimously approved the deal. Con-way stock is trading just below the tender offer price, while XPO stock is down more than five percent in the premarket.

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Published on Sep 10, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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