UPS - Why RXO Stock Is in the Fast Lane Today
2024-06-24 12:07:30 ET
Freight brokerage RXO (NYSE: RXO) has agreed to buy the Coyote Logistics business of United Parcel Service (NYSE: UPS) for $1.025 billion, a deal that would significantly boost its scale and market share. Investors are going along for the ride, sending RXO shares up more than 20% as of 11:15 a.m. ET.
UPS bought Coyote in 2015 for $1.8 billion as a way to expand its industrial freight operations, but the unit has never lived comfortably inside the shipping giant . In January, UPS said it was weighing the sale of Coyote to focus on less cyclical aspects of the transportation business .
RXO, which was spun out of trucking company XPO in November 2022, is focused on brokerage, or connecting customers in need of shipping services to shippers. The deal would make RXO the third-largest U.S. broker, adding about 15,000 customers to its existing 4,000 and pushing RXO deeper into verticals including food and beverage.
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Why RXO Stock Is in the Fast Lane Today