MEMPHIS (dpa-AFX) - FedEx Corp. (FDX) Thursday announced its plans to spin-off its FedEx Freight division. Following the news, shares of the company gained nearly 10% in after-hours trading session.
The separation is expected to be achieved in a tax-efficient manner for FedEx stockholders and executed within the next 18 months.
FedEx said that its Board of Directors concluded a comprehensive assessment of the role of FedEx Freight as part of its portfolio and has decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company
'This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,' said Raj Subramaniam, FedEx Corp. president and chief executive officer. 'This announcement is a testament to the strength of the business our team has built, and to our dedication to doing what's best for our customers, our team members, and our stockholders. Through this process, we will unlock value for our Freight business and position FedEx to create even greater value for stockholders.'
With revenue of $9.4 billion in fiscal 2024, FedEx Freight is the largest less-than-truckload services with the broadest network and fastest transit times in its industry.
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