XPO Logistics, Inc. (NYSE: XPO) today announced that its
board of directors has approved the previously announced separation
of its tech-enabled brokered transportation platform through the
distribution of all of the outstanding shares of common stock of
its wholly owned subsidiary, RXO, Inc., to holders of XPO common
stock.
The separation, once complete, will create two
transportation leaders with distinct investment identities and
clearly delineated value propositions in their respective
industries: RXO will be the fourth largest broker of full truckload
freight transportation in the United States, with a proprietary
digital freight marketplace, access to massive truckload capacity
and complementary brokered services for managed transportation,
last mile and freight forwarding. XPO will be a leading provider of
less-than-truckload transportation in North America, with a
European transportation business that the company plans to
divest.
Brad Jacobs, chairman and chief executive officer
of XPO Logistics, said, “I’m extremely pleased that our spin-off
has board approval and is moving toward a November 1 distribution
for our shareholders. XPO and RXO will each benefit from a strong
board of directors who bring valuable perspectives to the growth
strategy. I look forward to continuing to collaborate with Mario
and his team to create significantly more value in XPO with the
board’s support.”
New XPO Board
Composition
The appointment of a new slate of XPO board
members has been finalized as follows, effective with the
separation. Six of the eight directors are independent.
Brad Jacobs will continue to lead the board, and
Johnny C. Taylor, Jr., Allison Landry, Jason Aiken and Michael
Jesselson will remain as directors. Jacobs will serve as executive
chairman, as previously announced. Taylor will serve as lead
independent director and will chair the Compensation Committee.
Landry will serve as vice chairman and will chair the Nominating,
Governance and Sustainability Committee. Aiken will chair the Audit
Committee.
Three additional directors have been named to the
XPO board:
- Bella Allaire is executive vice president of technology
and operations with Raymond James Financial, and the former chief
information officer of UBS Wealth Management Americas.
- Mario Harik will become XPO’s chief executive officer
upon completion of the spin-off. He currently serves as president,
less-than-truckload – North America, and chief information
officer.
- Irene Moshouris is senior vice president and treasurer of
United Rentals, and formerly served in finance management roles
with Avon Products and GTE Corporation.
Additional Details of the
Distribution
The separation will be effected through a pro rata
distribution of all outstanding shares of RXO common stock to XPO’s
stockholders of record at the close of business on October 20,
2022, the record date for the distribution. If the distribution is
completed, each XPO stockholder will receive one (1) share of RXO
common stock for every one (1) share of XPO common stock held on
the record date.
The distribution does not require shareholder
approval, nor is any shareholder action necessary to receive shares
in the distribution of RXO common stock. XPO will distribute an
information statement or a notice to access the information
statement to all XPO shareholders entitled to receive the
distribution of RXO shares. The preliminary information statement
has been included as an exhibit to RXO’s Registration Statement on
Form 10 filed with the U.S. Securities and Exchange Commission and
describes RXO’s business, certain risks of owning RXO common stock
and other details regarding the separation and distribution.
Upon completion of the distribution, XPO will
continue to trade on the New York Stock Exchange under the ticker
symbol “XPO” and RXO will trade regular way on the New York Stock
Exchange under the symbol “RXO”. Beginning on or about October 27,
2022 and continuing up to October 31, 2022, there will be two
markets in XPO common stock on the NYSE: a “regular-way” market and
an “ex-distribution” market. XPO common stock that trades in the
“regular-way” market will trade with an entitlement to shares of
RXO common stock distributed pursuant to the distribution, such
that holders of XPO common stock who sell XPO shares regular way on
October 19, 2022 and up to and including October 31, 2022 will also
be selling their right to receive shares of RXO common stock in the
distribution. Shares that trade in the “ex-distribution” market
will trade without an entitlement to RXO common stock distributed
pursuant to the distribution. XPO investors are encouraged to
consult with their financial and tax advisers regarding the
specific implications of buying or selling XPO common stock on or
before the distribution date and the U.S. federal, state and local
or foreign tax consequences of the RXO distribution.
The distribution of RXO common stock is expected
to be completed at 12:01 am, Eastern Time, on November 1, 2022,
subject to the satisfaction or waiver of certain conditions,
including, but not limited to, the Registration Statement on Form
10 for RXO common stock being declared effective by the U.S.
Securities and Exchange Commission and other conditions described
in the preliminary information statement included in RXO’s
Registration Statement on Form 10 filed with the U.S. Securities
and Exchange Commission. There can be no assurance regarding the
ultimate timing of the distribution or that the distribution will
be completed.
About XPO
Logistics and RXO
XPO Logistics, Inc. (NYSE: XPO) is a leading
provider of freight transportation services, primarily
less-than-truckload (LTL) and truck brokerage. XPO uses its
proprietary technology to move goods efficiently through supply
chains. The company’s global network serves 50,000 shippers with
approximately 749 locations and 43,000 employees, and is
headquartered in Greenwich, Conn., USA.
Visit xpo.com for more information, and connect with XPO
on Facebook, Twitter, LinkedIn, Instagram and YouTube.
About the spin-off
XPO intends to spin off its tech-enabled brokered
transportation platform as RXO in 2022, creating two independent
publicly traded companies. RXO will be the fourth largest broker of
full truckload freight transportation in the United States, with a
proprietary digital freight marketplace, access to vast truckload
capacity and complementary brokered services of managed
transportation, last mile and freight forwarding.
Visit rxo.com for more information.
Forward-looking Statements
This release includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including
statements relating to the planned spin-off, the expected timing of
the spin-off and the anticipated benefits of the spin-off, and the
planned divesture of the European transportation business. All
statements other than statements of historical fact are, or may be
deemed to be, forward-looking statements. In some cases,
forward-looking statements can be identified by the use of
forward-looking terms such as “anticipate,” “estimate,” “believe,”
“continue,” “could,” “intend,” “may,” “plan,” “potential,”
“predict,” “should,” “will,” “expect,” “objective,” “projection,”
“forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,”
“trajectory” or the negative of these terms or other comparable
terms. However, the absence of these words does not mean that the
statements are not forward-looking. These forward-looking
statements are based on certain assumptions and analyses made by
the Company in light of its experience and its perception of
historical trends, current conditions and expected future
developments, as well as other factors the Company believes are
appropriate in the circumstances.
These forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions that may
cause actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by such forward-looking statements. Factors that might
cause or contribute to a material difference include our ability to
effect the spin-off of our tech-enabled brokered transportation
platform and meet the related conditions of the spin-off, the
expected timing of the completion of the spin-off and the terms of
the spin-off, our ability to achieve the expected benefits of the
spin-off, our ability to retain and attract key personnel for the
separate businesses, the risks discussed in our filings with the
SEC, and the following: economic conditions generally; the
severity, magnitude, duration and aftereffects of the COVID-19
pandemic, including supply chain disruptions due to plant and port
shutdowns and transportation delays, the global shortage of certain
components such as semiconductor chips, strains on production or
extraction of raw materials, cost inflation and labor and equipment
shortages, which may lower levels of service, including the
timeliness, productivity and quality of service, and government
responses to these factors; our ability to align our investments in
capital assets, including equipment, service centers and
warehouses, to our customers’ demands; our ability to implement our
cost and revenue initiatives; our ability to benefit from the
proposed spin-off; our ability to successfully integrate and
realize anticipated synergies, cost savings and profit improvement
opportunities with respect to acquired companies; goodwill
impairment, including in connection with the proposed spin-off;
matters related to our intellectual property rights; fluctuations
in currency exchange rates; fuel price and fuel surcharge changes;
natural disasters, terrorist attacks, wars or similar incidents,
including the conflict between Russia and Ukraine and increased
tensions between Taiwan and China; risks and uncertainties
regarding the potential timing and expected benefits of the
proposed spin-off of our tech-enabled brokered transportation
platform, including final approval for the proposed spin-off and
the risk that the spin-off may not be completed on the terms or
timeline currently contemplated, if at all; the impact of the
proposed spin-off of our tech-enabled brokered transportation
platform on the size and business diversity of our company; the
ability of the proposed spin-off of our tech-enabled brokered
transportation platform to qualify for tax-free treatment for U.S.
federal income tax purposes; our ability to develop and implement
suitable information technology systems and prevent failures in or
breaches of such systems; our indebtedness; our ability to raise
debt and equity capital; fluctuations in fixed and floating
interest rates; our ability to maintain positive relationships with
our network of third-party transportation providers; our ability to
attract and retain qualified drivers; labor matters, including our
ability to manage our subcontractors, and risks associated with
labor disputes at our customers and efforts by labor organizations
to organize our employees and independent contractors; litigation,
including litigation related to alleged misclassification of
independent contractors and securities class actions; risks
associated with our self-insured claims; risks associated with
defined benefit plans for our current and former employees; the
impact of potential sales of common stock by our chairman;
governmental regulation, including trade compliance laws, as well
as changes in international trade policies, sanctions and tax
regimes; governmental or political actions, including the United
Kingdom’s exit from the European Union; and competition and pricing
pressures.
All forward-looking statements set forth in this
release are qualified by these cautionary statements and there can
be no assurance that the actual results or developments anticipated
by us will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on us or our
business or operations. Forward-looking statements set forth in
this release speak only as of the date hereof, and we do not
undertake any obligation to update forward-looking statements to
reflect subsequent events or circumstances, changes in expectations
or the occurrence of unanticipated events, except to the extent
required by law.
There can be no assurance that the planned
spin-off or planned divesture of the European transportation
business will occur, or of the terms or timing of any transaction.
Where required by law, no binding decision will be made with
respect to the divestiture of the European business other than in
compliance with applicable employee information and consultation
requirements.
Investor Contacts
Tavio
Headley+1-203-413-4006tavio.headley@xpo.com
Jared
Weisfeld+1-475-299-7355jared.weisfeld@rxo.com
Media Contacts
Karina
Frayter+1-203-484-8303karina.frayter@xpo.com
Nina
Reinhardt+1-980-408-1594nina.reinhardt@rxo.com
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