Yellow Corp. and Roadway Corp. announced today they have entered into an agreement under which Yellow Corp. will acquire Roadway Corp. for about $966 million.
The combined enterprise, which will be known as Yellow-Roadway Corp., will be one of the largest transportation service providers in the world, with the ability to move shipments domestically and internationally.
Yellow-Roadway will be the largest U.S.-based transportation service provider with a focus on big shipments for business-to-business customers. The combined revenue of both companies for the 12 months ending the first quarter of 2003 was nearly $6 billion.
Bill Zollars, currently chairman, president, and chief executive officer of Yellow, will be chairman, president and chief executive officer of the combined company. James D. Staley, currently president and chief executive officer of Roadway, will continue to lead Roadway, which will be an operating entity under the Yellow-Roadway holding company. Three members of the Roadway board of directors will join the board of Yellow-Roadway -- Frank P. Doyle, John F. Fiedler, and Phillip J. Meek.
The complementary operations and capabilities of Yellow and Roadway provide the combined company with the increased scale, strong financial base, and market reach necessary to increase shareholder value and enhance customer service.
Specifically, this transaction will allow Yellow-Roadway to:
-- Strengthen its position in the highly competitive domestic and global transportation marketplace
-- Continue to invest in and grow the brands of both businesses
-- Implement best practices over a broader customer base
-- Leverage service capabilities and technologies for the benefit of customers
-- Introduce non-asset-based transportation management services to Roadway customers.
Yellow Corp. expects the transaction to be accretive within 12 months after closing and provide a return in excess of the weighted average cost of capital in the second year. Annual synergies of $45 million should be achieved by the end of the second year. By Year 5, annual synergies could be in excess of $125 million.
Commenting on the transaction, Zollars said, "This strategic combination brings the strengths of Yellow and Roadway together to capture significant synergies and growth opportunities. It accelerates our ongoing strategy, implemented over the past six years, to transform Yellow into a global transportation services and solutions leader. While there will be no change in the customer interface, customers can benefit from new and expanded service capabilities and greater technological advances."
Zollars continued, "Roadway's management team has done an outstanding job developing their company into a leading transportation service provider. The new organization can enhance shareholder value and employee opportunities at both companies."
Staley said, "Our decision to combine with Yellow Corp. is an excellent step forward for our company. Given the similarities in transportation operations, capabilities, and union relations that our companies share, partnering with Yellow is a logical move that clearly positions our combined organization for long-term growth and success.
"Our Akron headquarters will continue to be a major center of operations, and we will continue to invest in and build the brands of both companies," added Staley. "Moreover, Roadway employees will become part of a larger and stronger enterprise well positioned for profitable growth."
"Our synergy teams are focused on reducing administrative costs, creating efficiencies, and identifying duplicative areas within our two organizations," Zollars said, adding, "We expect minimal employee displacement among Field Sales & Operations at either company. Among other employee groups, all decisions are expected to made based on best practices and expertise, irrespective of company affiliation."
The combined enterprise, which will be known as Yellow-Roadway Corp., will be one of the largest transportation service providers in the world, with the ability to move shipments domestically and internationally.
Yellow-Roadway will be the largest U.S.-based transportation service provider with a focus on big shipments for business-to-business customers. The combined revenue of both companies for the 12 months ending the first quarter of 2003 was nearly $6 billion.
Bill Zollars, currently chairman, president, and chief executive officer of Yellow, will be chairman, president and chief executive officer of the combined company. James D. Staley, currently president and chief executive officer of Roadway, will continue to lead Roadway, which will be an operating entity under the Yellow-Roadway holding company. Three members of the Roadway board of directors will join the board of Yellow-Roadway -- Frank P. Doyle, John F. Fiedler, and Phillip J. Meek.
The complementary operations and capabilities of Yellow and Roadway provide the combined company with the increased scale, strong financial base, and market reach necessary to increase shareholder value and enhance customer service.
Specifically, this transaction will allow Yellow-Roadway to:
-- Strengthen its position in the highly competitive domestic and global transportation marketplace
-- Continue to invest in and grow the brands of both businesses
-- Implement best practices over a broader customer base
-- Leverage service capabilities and technologies for the benefit of customers
-- Introduce non-asset-based transportation management services to Roadway customers.
Yellow Corp. expects the transaction to be accretive within 12 months after closing and provide a return in excess of the weighted average cost of capital in the second year. Annual synergies of $45 million should be achieved by the end of the second year. By Year 5, annual synergies could be in excess of $125 million.
Commenting on the transaction, Zollars said, "This strategic combination brings the strengths of Yellow and Roadway together to capture significant synergies and growth opportunities. It accelerates our ongoing strategy, implemented over the past six years, to transform Yellow into a global transportation services and solutions leader. While there will be no change in the customer interface, customers can benefit from new and expanded service capabilities and greater technological advances."
Zollars continued, "Roadway's management team has done an outstanding job developing their company into a leading transportation service provider. The new organization can enhance shareholder value and employee opportunities at both companies."
Staley said, "Our decision to combine with Yellow Corp. is an excellent step forward for our company. Given the similarities in transportation operations, capabilities, and union relations that our companies share, partnering with Yellow is a logical move that clearly positions our combined organization for long-term growth and success.
"Our Akron headquarters will continue to be a major center of operations, and we will continue to invest in and build the brands of both companies," added Staley. "Moreover, Roadway employees will become part of a larger and stronger enterprise well positioned for profitable growth."
"Our synergy teams are focused on reducing administrative costs, creating efficiencies, and identifying duplicative areas within our two organizations," Zollars said, adding, "We expect minimal employee displacement among Field Sales & Operations at either company. Among other employee groups, all decisions are expected to made based on best practices and expertise, irrespective of company affiliation."
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