FedEx Corp, one of the world’s largest logistics and delivery companies, has announced it will separate its freight arm – FedEx Freight – into a new, publicly traded company.
The separation is expected to be executed within the next 18 months for the company’s stockholders, with the newly created independent FedEx Freight to operate alongside FedEx.
The company says the split will ensure customers can continue to receive the “superior service, speed and coverage they have come to expect from FedEx”.
In 2024 FedEx totalled revenue of over USD$78 billion and profit through its service of over 220 countries and territories. It reported profits of US$9.4 billion over the 2024 fiscal year.
The split will allow for more customised operational execution, with FedEx Corp President and CEO Raj Subramaniam stating the separation can only occur because of the company’s overall strength.
“This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,” Subramaniam says.
“This announcement is a testament to the strength of the business our team has built, and to our dedication for doing what is best for our customers, our team members and our stockholders.
“Throughout this process, we will unlock value for our Freight business and position FedEx to create even better value for stockholders.”
A recently completed assessment has led to FedEx concluding commercial collaboration through an independent FedEx and FedEx Freight will result in additional strategic opportunities for both businesses.
Through a separation, it is believed both FedEx and FedEx Freight will benefit from:
- Enhanced operational focus and strategic execution
- Distinct and compelling investment profiles
- Strong balance sheet and capital allocation optionality
- Maintained commercial, operational and technology synergies
- A shared brand.
Vice Chairman of the FedEx Board and Chairman of the Audit and Finance Committee which led the oversight of the strategic analysis R. Brad Martin says the separation of the companies will lead to increased growth.
“Over 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,” he says.
“Building upon that powerful foundation, and following a careful assessment of our portfolio, the FedEx Corporation Board is confident a separation of FedEx Freight will drive continued growth and value creation.”
The final separation is subject to regulatory and certain other conditions, and final approval from the FedEx Board of Directors.
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