Swift Transportation and Knight Transportation Expecting To Merge Within the Next Few Months
Knight Transportation and Swift Transportation are two American trucking companies. On Monday, the pair announced they would combine companies in an all stock-deal while they seek to collectively scale production amid growing pressures on pricing within the American trucking sector.
Essentially, if and when the new deal is completed, the two will operate under a single holding company but will maintain distinct brands and operations. Combined the firm will be know, unceremoniously, as Knight-Swift Transportation Holdings; it is estimated they would have reported approximately $5 billion in annual revenue last year. The new company will have an operations base in Phoenix, with about 23,000 trucks, total, and 28,000 employees; as well as 77,000 trailers. They also expect to save more than $100 million in 2018, and another $150 million in 2019 after the close of the merger.
“This is a terrific opportunity for our stockholders, who stand to benefit from the significant upside potential of this transaction,” explains Swift Transportation chairman Richard Dozer, the Swift chairman, in a news release. “Indeed, by coming together under common ownership, the companies will be able to capitalize on economies of scale to achieve substantial synergies.”
Executive for Knight—Kevin Knight—will continue to serve as the chairman of the new partnership with Knight chief executive Dave Jackson holding his same position as well.
Dave Jackson comments, “Under this ownership structure, we will be able to operate our distinct brands independently with experienced leadership in place. We look forward to learning from each other’s best practices as we seek to be the most efficient company in the industry.”
The terms of this transaction enlist that Swift investors will receive 0.72 shares of the new company for each share of Swift they currently hold. Knight investors will receive equal shares in the new company per each current share of Knight stocks they hold. In all, Swift shareholders will hold roughly 54 percent of the combined company, and Knight investors will own the other 46 percent.
Of course, this transaction is still pending and is subject to regulatory approval. Still, the two companies expect to close the matter within the third quarter. Regardless of the pending matter, shares of Swift and Knight were both up today: 23.7 percent to $24.77 and 14 percent to $34.92, respectively.