Swift and Knight to Merge

Washington DC
Swift Transportation is merging with Knight Transportation in a stock swap that would combine two of the biggest operators in the freight tranpsortation industry, in a combined deal worth more than $5 billion. As part of the deal, each Swift share would be converted into 0.72 shares of the new entity through a reverse stock split. Knight shares would be exchanged one-for-one. The new group is to be named Knight-Swift Transportation Holdings Inc. and each company’s brands and operations would remain distinct.

Both companies are members of The Trucking Alliance, with Swift Transportation having accepting an invitation to affiliate with the group last month.

Swift is the fifth-largest trucking company in the U.S. in terms of revenue and Knight is 22nd, according to industry researchers SJ Consulting Group. Combined, the group is expected to become the largest truckload carrier and may be ranked as high as the third largest US freight carrier, behind United Parcel Service Inc. and FedEx Corp.

The deal is the largest in US trucking history, exceeding by $3 billion an acquisition of Con-Way by XPO Logistics in 2015. Swift and Swi Knight share history, in that Randy Knight, who founded Knight Transportation in 1990 with three cousins, was a former part-owner of Swift under then-Chairman Jerry Moyes. Mr. Moyes, who started Swift in 1966, retired at the end of last year, leaving Richard Stocking as chief executive. Mr. Moyes, a director and controlling shareholder of Swift, is to be on the combined company’s board but will have a diminished role, with 24% of the new company’s shares.

Moyes will be allowed to name another board member, Swift will name two board members and up to 10 will come from the current Knight board.