NEW YORK, N.Y. — Trucking giant Yellow Corp. is buying out Roadway Corp. for US$966 million in cash and stock.

Under the terms of the deal, Overland Park, Kan.-based Yellow will also assume $140 million US in Roadway debt and Roadway will be positioned as a unit within the newly named Yellow-Roadway Corp.

Both companies are less-than-truckload carriers, meaning they consolidate freight from multiple customers, but company administrators said the brands might specialize in different things over time.

Despite the weak U.S. economy, the trucking sector benefited in the past year from the September collapse of Consolidated Freightways, which filed for Chapter 11 bankruptcy and liquidated its assets. That enabled Yellow, Roadway and other competitors to snap up increased shares of the market.

Even before Consolidated’s bankruptcy, though, large trucking companies had been increasing their freight levels as thousands of smaller carriers went out of business during the latest economic downturn.

In the year ending March 31, Yellow and Roadway had combined revenue of nearly $6 billion US. Once combined, the companies said they expect to save $45 million by the end of their second year together from operating efficiencies and cost cuts.
(With files from AP)