U.S. trucking companies Swift, Knight to merge

Trucking and logistics operators Swift Transportation Co and Knight Transportation Inc are merging in a stockswap deal, creating a company with a market value of more than US$5 billion.

The merger, which combines Swift’s scale with Knight’s operational prowess, will give the new entity more muscle to operate in an in- dustry struggling with excess capacity that has hurt prices and squeezed profits.

Shareholders of Swift will own 54 per cent of the new entity and Knight shareholders the rest after the deal closes.

The companies, based in Phoenix, have a shared history — Jerry Moyes started Swift in 1966, while Randy Knight, who was a partowner of Swift — founded Knight Transportation along with three cousins in 1990.

Knight’s executive chairman, Kevin Knight, will assume the same title at the new company. Moyes, who retired as co- CEO of Swift last year, will become one of the directors of the new company. The Jerry Moyes family, however, will own about 24 per cent of Knight-Swift.

“Effectively, this deal represents the pupil acquiring the teacher’s company and will give the Knight team control of the new entity,” Stifel Transportation & Logistics Research Group analyst John Larkin said in a note.

The deal, which would create the biggest truckload operator in North America, came days after rival Schneider National Inc went public in an IPO that raised about US$550 million.