XPO to pay $870m for Yellow properties

yellow

Trucking company, XPO Inc, was the top bidder at a sale of bankrupt Yellow’s assets, winning the right to 28 service centres at a price tag of $870 million.

The 100-year-old transport firm, which serviced the less-than truckload market, filed for bankruptcy protection in August blaming ongoing strike action by the International Brotherhood of Teamsters union for its financial woes.

Yellow’s 17.5 million annual shipments made it the third-largest in the U.S., but it had an outstanding debt of about $1.5 billion as of March, despite receiving a $700 million loan from the federal government in 2020. The company had been in an ongoing battle with the Teamsters union, which represents 22,000 drivers and dock workers, over unpaid pension and health insurance contributions.

According to a report by Reuters, XPO expects the deal, which is subject to court approval, to add to core profit in 2024 and adjusted profit per share from continuing operations from 2025.

XPO’s successful bid was part of a court-supervised auction that saw nearly two dozen companies, including Estes Express Lines and Knight-Swift Transportation Holdings, win rights to purchase Yellow’s assets for $1.88 billion, as per a court filing on Monday.

Previously, one of America’s largest trucking companies has stopped operations, leaving the country in what experts are calling a delivery crisis.

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