FedEx Corp. announced Friday that it is buying Watkins Motor Lines for $780 million.
"This acquisition will extend our leadership position in the heavy freight sector and provide new growth opportunities for the business," said Frederick W. Smith, FedEx chairman, president and CEO, in a statement. "Our customers have increasingly asked us to provide a broader range of transportation and supply chain services, and as a result of this acquisition, we will be in a better position to meet their expectations."
Lakeland, Fla.-based Watkins Motor Lines is a privately held provider of long-haul less-than-truckload carrier. The company's annual revenues total over $1 billion; it employs a work force of 10,000 employees and was founded in 1932.
Under the deal, which is expected to close in first quarter 2007, Watkins will be rebranded as FedEx National LTL and will operate as a separate network within the FedEx Freight division. FedEx is also acquiring the assets of Watkins' Canadian arm, Watkins Canada Express, and will rename it FedEx Freight Canada. Watkins management will remain in place with Chip Watkins serving as president. He will report to Patrick L. Reed, executive vice president and chief operating officer of FedEx Freight, who has responsibility for all LTL operations in the U.S.
Douglas G. Duncan, president and CEO of FedEx Freight, said Watkins' services are complementary to FedEx Freight, and the addition of Watkins' three-day or more long-haul service to FedEx Freight's industry-leading next-day and second-day regional LTL service will extend FedEx's leadership position in the freight sector.
"This acquisition is an opportunity to do more business with our current shippers and to target new customers with a comprehensive LTL solution, allowing us to grow faster than the industry in which we operate," Duncan said.
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