NEW YORK, (July 8, 2003) – North America’s largest freight carrier said it plans to buy one of its biggest rivals for nearly $1 billion, creating a world trucking and shipping powerhouse, Reuters news agency reported today.

Yellow Corp. of Overland Park, Kan. and Akron, Ohio-based Roadway Corp. — two of the most recognized names in transportation — announced they have entered into a definitive agreement under which Yellow will acquire Roadway for about $966 million, or $48 per share — half in stock and half in cash. Roadway closed at $30.02 yesterday on Nasdaq. Yellow will also assume an expected $140 million in net Roadway indebtedness, bringing the enterprise value of the acquisition to $1.1 billion.

The two companies, which will merge under the name Yellow-Roadway Corp., combined for nearly $6 billion in revenue for the twelve months ending in the first quarter of 2003. The new company expects about $45 million to be achieved by the end of the second year, and year five annual synergies could be in excess of $125 million.

Bill Zollars, currently chairman, president, and CEO of Yellow, will hold the same three titles for the combined company. James D. Staley, currently president and CEO of Roadway, will continue to lead Roadway. “Our synergy teams are focused on reducing administrative costs, creating efficiencies, and identifying duplicative areas within our two organizations,” Zollars said in a press release.

Alan Robison, president of Winnipeg-based LTL carrier Reimer Express Lines, a subsidiary of Roadway, told Today’s Trucking that all indications are that the new company will continue to run each operation independently from their existing terminals and facilities.

Robison agreed that with margins as slim as they are and rising costs becoming more difficult control, the industry may see more consolidation in the coming years. “What generally causes those things to happen is when carriers get into problems which always makes them a good candidate for that sort of thing,” he says. “By the same token I think we’re finding in transportation that those that are getting bigger want to provide for every customer (as many services) that are possible.”