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Global Industry News

FedEx announces plan to split off freight unit into separate company

Policy

Lance Moll FedEx Freight Leadership President and CEO | FedEx

By Sky Industry News

Dec 19, 2024

FedEx Corp. announced plans to separate its FedEx Freight unit, forming two publicly traded companies. This decision follows a comprehensive assessment by the company's Board of Directors. The separation is expected to be completed within 18 months and aims to benefit stockholders in a tax-efficient manner.

The move will allow both FedEx and FedEx Freight to focus on their respective growth strategies while maintaining cooperation on key initiatives. Customers are assured of continued service quality. Raj Subramaniam, FedEx Corp.'s president and CEO, stated, "This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market."

R. Brad Martin, vice chairman of the Board, emphasized confidence in the decision's potential for growth and value creation: “Building upon that powerful foundation, and following a careful assessment of our portfolio, the FedEx Corporation Board is confident that a separation of FedEx Freight will drive continued growth and value creation.”

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FedEx aims for enhanced operational focus, distinct investment profiles, strong balance sheets, maintained synergies, and shared branding through this separation. The company highlights its history in express transportation with $78.3 billion in revenue for fiscal year 2024 and strategic initiatives like DRIVE expected to save $4 billion by fiscal year 2025.

FedEx Freight reported $9.4 billion in revenue for fiscal year 2024 as the largest less-than-truckload (LTL) carrier with an emphasis on safety and efficiency.

The transaction process involves creating two independent public companies through capital markets transactions with regulatory approval required. Goldman Sachs & Co. LLC acts as financial advisor while Skadden, Arps, Slate, Meagher & Flom LLP provides legal counsel.

FedEx Corp., recognized globally for transportation services and sustainability goals such as carbon-neutral operations by 2040, emphasizes ongoing commitment amid potential risks related to forward-looking statements regarding this separation.

Organizations Included in this History

FedEx

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