UPS and Overnite Corp. on Monday announced that UPS will acquire Overnite for $43.25 per share, approximately $1.25 billion in cash.

The deal will combine the largest single fleet under Teamster contract with Overnite, a very large and famously non-union fleet that won a protracted battle against Teamster organizers in the 1990s when it was still a division of Union Pacific Corp. Overnite was spun off in a public stock offering in 2003 and is currently the 17th largest commercial carrier of any kind in the U.S.
An Overnite acquisition will immediately position UPS as a top U.S. LTL carrier. The acquisition, expected to close during the third quarter of 2005, is an all-cash transaction that will require regulatory approvals and the approval of Overnite's shareholders. The Overnite board of directors has approved the agreement and recommended approval by its shareholders.
The acquisition, if consummated, puts UPS in the LTL business far ahead of rival Fedex Freight, at least in terms of service coverage. Fedex Freight came into being in February, 2001, when Fedex dropped the identities of the two regional carriers it had purchased, Viking Freight and American Freightways, and re-branded them Fedex Freight.