Wednesday, December 10, 2003

Shareholders back Yellow buy of Roadway trucking



The Associated Press

OVERLAND PARK, Kan. - Yellow Corp.'s acquisition of Akron, Ohio-based Roadway Corp. advanced Tuesday as shareholders of both trucking companies approved the cash-and-stock deal that had been valued at $966 million.

The transaction, expected to close Thursday, will result in creation of Yellow Roadway Corp., which would control more than 15 percent of what is known as the less-than-truckload market. Less-than-truckload carriers consolidate freight from multiple customers.

Bill Zollars, Yellow's chairman, president and chief executive, has said the two companies will merge some administrative operations but will continue to compete for trucking business.

The combination will produce some job cuts, mainly in areas where the companies share dual infrastructure. But Zollars said that number is expected to be less than 200 people out of a combined work force of about 50,000.

Though earlier estimates were the acquisition would save about $45 million in the first year, Zollars said the first-year savings probably will be closer to $125 million.

Results of the votes were announced during special shareholder meetings at Yellow's headquarters in this Kansas City suburb and at Roadway's headquarters in Akron, Ohio. Yellow Corp. stockholders voted 21,732,854 to 252,323 in favor of the merger.

Zollars said the deal will give 38 percent of Yellow Corp. stock to Roadway shareholders, who will get 1.752 shares of Yellow for each share they own of Roadway. The ratio is based on a 20-day average of $31.51 for Yellow stock, which was at $23.25 in July when the deal was announced.

In the year ending March 31, the companies had a combined revenue of nearly $6 billion. That would make Yellow Roadway the nation's third-largest ground transportation company, behind only United Parcel Service Inc. and FedEx Corp., each with annual revenue far exceeding $20 billion.

The acquisition was announced in July.



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