The purchase price is approximately $966 million or about $48 per share of Roadway. Since Yellow is also assuming $140 million in Roadway debt, when all is said and done, the final cost to Yellow will be about $1.1 billion. Combined income for the two LTL carriers year over year through the first quarter of 2003 is $6 billion.
The new entity will be called Yellow-Roadway, with all points nailed down within a year. Although there will be an automatic look at the deal by the Federal government for violation of monopoly laws, an okay is expected.
Comments by executives of the new entity indicate that shippers should see no immediate changes in their business dealings with Yellow-Roadway -- it is their intention to keep both brands in the marketplace. Initially the strategy is to cut back office expenses, not to close terminals and lay off drivers. The anticipation is that these early moves will result in savings in the neighborhood of $45 million.
Bill Zollars, current President and CEO of Yellow, will be Chairman, President and CEO of Yellow-Roadway. “This strategic combination brings the strengths of Yellow and Roadway together to capture significant synergies and growth opportunities,” said Zollars. “While there will be no change in the customer interface, customers can benefit from new and expanded service capabilities and greater technological advances.”
James D. Staley, present President and CEO of Roadway, will continue to head the Akron OH-based carrier in the new entity. “Our decision to combine with Yellow Corporation is an excellent step forward for our company,” he said. “Given the similarities in transportation operations, capabilities and union relations our companies share, partnering with Yellow is a logical move that clearly positions our combined organization for long-term growth and success.”
