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FedEx acquires Caliber
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October 6, 1997: 5:33 p.m. ET
Air express titan acquiring RPS and subsidiaries in $2.4 billion stock swap
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NEW YORK (CNNfn) - Federal Express Corp. said Monday it is buying Caliber Systems Inc. in a stock swap valued at $2.4 billion.
FedEx is acquiring Caliber and its subsidiaries, including package carrier RPS Inc. FedEx will create a new holding company, FDX Corp., that will hold FedEx plus the newly-acquired RPS, Viking Freight, Caliber Logistics, Roberts Express and Caliber Technology.
Under an agreement approved by the boards of both companies, Caliber shareholders will receive 0.8 of a Federal Express share for each of their 38.9 million Caliber shares.
FedEx shares were off 3-7/8 to 74-7/8 on the news. Caliber stock was up 3 to 58-5/16 in late trading.
The deal, reached over the weekend, still must pass federal government review. It will make FDX Corp. a $15 billion global transportation and logistics behemoth.
"This acquisition creates a powerful combination that will propel both companies to new heights. Customers will now have a broader portfolio of services unmatched by any competitor," said FedEx chairman, president and chief executive officer Frederick Smith.(263K WAV) or (263K AIFF)
FedEx said each of the new company's business units will continue to operate separately.
Smith will serve as chairman, president and chief executive officer of the new holding company. Daniel Sullivan, chairman, president and chief executive of Caliber, will become the head of RPS Inc.
After the deal is finalized, the companies of FDX Corp. will employ about 170,000 people worldwide. Caliber's headquarters in Akron, Ohio, will close and the 150 employees there will be transferred to FDX Corp. Those not accepting transfers will receive severance packages.
--Cyrus Afzali
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