UPS Freight is being sold to a Canadian trucking giant for $800 million, according to Richmond Times-Dispatch.
UPS Freight, created in 2005 when Atlanta-based United Parcel Service Inc. purchased the former Overnite Transportation, is being sold to TFI International Inc., the companies announced Monday.
When the deal is completed — expected sometime during the second quarter, pending regulatory approvals — about 90 percent of the acquired business will operate independently under the new name of TForce Freight. TForce Freight will continue to serve UPS Freight’s ongoing less-than-truckload (LTL) operations while the remaining dedicated truckload division of UPS Freight will become part of TFI’s truckload business segment.
UPS Freight, which generated an estimated $3.14 billion in revenue last year and had an estimated $39 million operating profit, is one of the largest less-than-truckload carriers in the U.S. The combination should make Montreal-based TFI International one of the largest LTL carriers in North America.
All of UPS Freight’s 14,500 workers will become employees of TFI International when the deal is completed, the companies said. About 80 percent of those employees are full time.
“Our strategy of operating independent business units with a high degree of accountability is well-suited for building on UPS Freight’s strengths and improving margins over time,” said Alain Bédard, chairman, president and CEO of TFI International, in a statement.
UPS decided to sell its freight business after conducting a thorough evaluation of its portfolio, the company said, noting that the sale aligns with its “better not bigger” strategic positioning to focus on its small-package delivery business.
UPS and TFI International also plan to enter into an agreement for UPS Freight to continue to utilize UPS’ domestic package network to fulfill shipments for five years. UPS also plans to retain pension assets and liabilities for employees who worked for the company before the deal is completed.
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