Acquisition creates new US logistics giant

Acquisition creates new US logistics giant – Tuesday, July 15, 2003

In one of the largest acquisition deals to have been undertaken in the logistics industry, US based road freight company, Yellow has acquired rival, Roadway for almost a $1bn (€1.46bn). The new company, which will be branded Yellow-Roadway Corp, will have combined sales of $6bn (€8.76bn). The majority of its revenue will be generated in the US domestic less-than-truckload (LTL) market.

Even though the deal will put the company in the top echelon of logistics providers on the basis of its revenues, its impact on the global industry will, in the short term, be very limited. Neither of the two companies have a major presence outside of the USA, although Yellow has a European network of agents. Until last year it had a ten year partnership with Frans Maas, before it changed its strategy and set up 14 individual partnerships with companies such as Road Air in the Benelux, Alloin International in France, Enterprise Forwarding in the UK, Hamann International in Germany and Cargo Partner in eastern Europe. In total it works with 66 partners worldwide, serving 88 countries.

The acquisition of Roadway will present Yellow with a major opportunity to increase its global presence. Although there is no evidence that the new company will seek to enter the European market by way of acquisition (although this was rumoured during the mid-1990s), there is no doubt that the management has a keen interest in developing its global services. The company has the same ‘one stop shop’ strategy as many European freight operators and this will inevitably lead the company towards the development of integrated global logistics services for its US client base.