Yellow, Roadway merger may spark copy-cat deals

OVERLAND PARK, Kan. (Oct. 20, 2003) — North America’s largest trucking carrier announced a shareholder vote for Dec. 9 as the closing date of its acquisition of former rival Roadway Corp.

The announcement by Yellow Corp. — which created a trucking and shipping powerhouse when it purchased Roadway earlier this summer for nearly $1 billion — is the strongest sign yet the company expects to receive antitrust clearance by the Department of Justice for what would effectively be the largest trucking merger ever.

Trucking industry experts told the Daily Deal that the merger could trigger a wave of consolidation as many of the regional shippers handling LTL-sized cargoes like United Parcel Service Inc. look to bulk up to compete against rivals like FedEx Corp.

In the preliminary proxy filed Oct. 17, Yellow said it has still not yet complied with the government’s second request for more details on the deal. Sources said that compliance would have to occur within the next two weeks in order for Yellow to meet the Dec. 11 goal for closing the deal.

The two companies, which will merge under the name Yellow-Roadway Corp., combined for nearly $6 billion in revenue for the twelve months ending in the first quarter of 2003. The new company expects about $45 million to be achieved by the end of the second year, and year five annual synergies could be in excess of $125 million.

— With files from the Daily Deal