Union Pacific to sell Overnite

| 8/5/2003

Union Pacific announced Aug. 4 it would sell Richmond, VA-based Overnite, a subsidiary of the railroad and one of the largest less-than-truckload carriers in the United States.

The sale will be made through an initial public offering of stock; Overnite has already filed for the stock offering through the Securities and Exchange Commission. Union Pacific said in a statement that if certain conditions were met during the sale process, the railroad would sell all of its interest in the trucking company.

Company spokeswoman Kathryn Blackwell told The Associated Press the sale could occur before the end of the year.

The sale is one of a series of changes recently in the less-than-truckload sector. In early July, Yellow Corp. agreed to acquire Roadway Corp. for about $966 million in cash and stock, plus $140 million in debt, for a total value of $1.1 billion. The company, which will be known as Yellow-Roadway Corp., will be the largest U.S.-based less-than-truckload carrier.

By comparison, an analyst quoted by The AP placed Overnite’s book value at $600 million.

For years, LTL freight was dominated by Yellow, Roadway and Consolidated Freightways. Consolidated Freightways, which had been the nation's third-largest trucker, closed and filed for bankruptcy protection last September.

Overnite has a fleet of more than 6,000 tractors and 21,000 trailers and 208 service centers. Before their merger, Yellow reported it had 8,000 tractors and 35,000 trailers, while Roadway reported it had more than 10,000 tractors and more than 36,000 trailers.