The Board of Directors of FedEx has approved a proposal to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. The separation is expected to be achieved in a tax-efficient manner for FedEx stockholders and executed within the next 18 months, says an official release. With revenue of .4 billion in fiscal 2024, FedEx Freight is the largest less-than-truckload (LTL) carrier with the broadest network and fastest transit times in its industry.
The company has deep and long-standing relationships with customers who value choice, simplicity and reliability. With a focus on safety, facility utilisation, revenue quality and operational efficiency, FedEx Freight has maintained its leading market share position while increasing operating profit by nearly 25 percent on average per year over the last five years. The business has delivered approximately 1,100 basis points of operating margin expansion over the same period.
FedEx 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. ” As two industry-leading public companies, FedEx and FedEx Freight will continue to pursue their growth strategies, the release added. “
The separation will allow for more customised 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. This announcement is a testament to the strength of the business our team has built, and to our dedication to doing what’s 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.” FedEx expects to commence the separation process immediately, subject to regulatory and certain other conditions and final approval of the Board of Directors.
