ATLANTA, (May 16, 2005) — The largest parcel carrier in the world has swallowed a significant amount of LTL market share with the acquisition of Virginia-based Overnite Corp. for $1.25 billion.

UPS says the Overnight buy will expand its heavy freight portfolio by offering a variety of LTL and truckload services to North American customers. It also will immediately position UPS as a top five North American LTL carrier.

Overnite’s management team will remain in place.

Today’s announced deal — the single largest acquisition in UPS history — means the company can deliver heavy freight in its own trucks rather than contracting it out as it has done in the past. The extra road capacity rounds out a full suite of heavy freight services via air, ground and ocean.

Overnight is a U.S. LTL giant and one of the largest 20 for-hire carriers in North America. Its fleet consists of 6,700 tractors and 22,000 trailers. The company has 208 service centres in all 50 states, and through various partnerships, provides direct service to over 45,000 cities in the U.S., Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. Last year, Overnite reported net income of $63.3 million in 2004 on revenue of $1.65 billion.

“Overnite is a perfect strategic fit for our company,” said Mike Eskew, UPS chairman and CEO in a press release. “We want to offer our customers the broadest portfolio of transportation and logistics services available from a single source and this is an important capability that we needed to have.”

UPS has always had a minor stake in heavy freight, but is seeking an expansion. Last December, UPS bought Menlo Worldwide Forwarding, an air freight business in Redwood City, Calif., which has helped it expand into time-definite guarantees on heavy freight.

Under the deal, Overnite stockholders will receive $43.25 for each Overnite share, representing a 46 percent premium to Overnite’s closing price of $29.58 on Friday.

The deal has been approved by Overnite’s board and is expected to close during the third quarter, pending regulatory clearance and shareholder acceptance.