C.H. Robinson Worldwide strikes a $5.8B deal to acquire RXO

C.H. Robinson Worldwide, Inc. (CHRW) announced on Monday that it struck a deal to acquire RXO Inc. (RXO) in a stock-and-cash transaction for an implied value of $5.8B. The deal will create a combined company with an enterprise value of over $25B.

Under the terms of the merger agreement, RXO stockholders may elect to receive either the standard mixed consideration consisting of $17.25 in cash and 0.0856 shares of C.H. Robinson (CHRW) common stock, an all-cash consideration of $30.25 per share, or an all-stock consideration of 0.1992 shares of C.H. Robinson (CHRW) common stock. RXO (RXO) stockholders are expected to own 11% of the combined company upon transaction close.

The combination of both companies' robust trucking brokerage and managed transportation businesses, along with C.H. Robinson's (CHRW) global forwarding and RXO's (RXO) strengths in expedited and last mile, is anticipated to create a more comprehensive offering for customers across a larger and denser network. Through the implementation of its proven Lean AI operating model across RXO’s business, C.H. Robinson expects to realize approximately $300M of net run-rate cost synergies within two years post-close. Specifically, C.H. Robinson (CHRW) expects to unlock significant productivity improvements and drive operating margin expansion as it applies its proven Lean AI operating model to RXO’s business.

"This transaction is a natural next step in our transformation, allowing us to create a more scaled, resilient North American third-party logistics provider positioned to offer exceptional customer service and redefine the future of our industry," highlighted C.H. Robinson (CHRW) CEO Dave Bozeman.

Upon completion of the transaction, C.H. Robinson (CHRW) will integrate RXO (RXO) primarily into its NAST division.

Shares of RXO (RXO) shot up 17.7% in premarket trading, while C.H. Robinson (CHRW) traded flat.