announced its intent<\/a> to separate its FedEx Freight unit into a separate company on December 19th after an assessment made by the company\u2019s board of directors. The company says that the separation will maintain \u201coperational synergies between both companies\u201d while promoting \u201cgreater strategic, operational and financial execution for each company and its stakeholders.\u201d<\/p>\nThis split will make FedEx Freight the largest LTL carrier in the United States.\u00a0<\/p>\n
\u201cThis is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,\u201d FedEx CEO Raj Subramaniam said. \u201cThis announcement is a testament to the strength of the business our team has built, and to our dedication to doing what\u2019s best for our customers, our team members and our stockholders. Through this process, we will unlock value for our Freight business and position FedEx to create even greater value for stockholders.\u201d<\/p>\n
The separation process has already begun and is expected to take 18 months.\u00a0<\/p>\n
\u201cThe separation will allow for more customized operational execution along with more tailored investment and capital allocation strategies to serve the unique and evolving needs of both the global parcel and LTL markets,\u201d FedEx said. \u201cThe [companies] will also maintain the strategic advantages of cooperation on key commercial, operational and technology initiatives.\u201d<\/p>\n
\u201cThe benefits of the existing FedEx and FedEx Freight relationships will be optimized through commercial agreements between the two entities to maintain operational and service-level continuity. Ongoing collaboration will be designed to improve the value propositions of both companies by accelerating speed, improving coverage and driving efficiencies that will lower the cost to serve.\u201d<\/p>\n
\u201cOver the last 50 years, FedEx has built an unmatched global platform that has produced significant value for our stockholders and opportunities for our team members,\u201d said R. Brad Martin, vice chairman of the board and chairman of the Audit and Finance Committee. \u201cBuilding upon that powerful foundation, and following a careful assessment of our portfolio, the FedEx Corp. board is confident that a separation of FedEx Freight will drive continued growth and value creation.\u201d<\/p>\n
\u201cFedEx Freight is expected to benefit from a strong balance sheet that will allow it to maintain and extend its leadership position in the LTL market,\u201d the release said.<\/p>\n<\/div>\n<\/div>\n
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