US-based company, United Parcel Service (UPS), has agreed to sell an arm of its business.
UPS is selling UPS Freight (UPSF) to TFI International for $800 million USD, subject to working capital and other adjustments.
“We’re excited about the future and the opportunities this creates for both UPS and UPS Freight as part of TFI International Inc.,” said UPS Chief CEO, Carol Tomé.
“The agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers.”
The decision to sell UPS Freight was reached following a thorough evaluation of the UPS portfolio, and aligns with the company’s ‘better not bigger’ strategic positioning.
UPS and TFI International will also enter into an agreement for UPS Freight to continue to use UPS’ domestic package network to complete shipments, for a period of five years.
The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close during the second quarter of 2021. UPS expects to recognise a non-cash, pre-tax impairment charge of approximately $500 million on its statement of consolidated income for the year ended 31 December 2020.
With an operating history of over 85 years, UPS Freight is one of the largest Less Than Truckload (LTL) carriers in the US, offering a full range of regional and long haul solutions and an on-time delivery guarantee for all LTL shipments and is headquartered in Richmond, VA.