Swift and M.S. Carriers to merge

By Staff -- Logistics Management, 1/1/2001

Truckload carriers Swift Transportation Co. Inc. of Phoenix, Ariz., and M.S. Carriers Inc. of Memphis, Tenn., have agreed to a merger in which M.S. Carriers will become a wholly owned subsidiary of Swift. The combination of Swift and M.S. Carriers will create one of the largest North American truckload motor carriers, with more than $2 billion in annual revenues, 15,000 tractors, and significant service penetration in Mexico, Canada, and the United States.

Both companies focus on short to medium hauls and regional operations. Swift is stronger in the Western United States, while M.S. Carriers operates primarily in the Eastern United States and Mexico. Swift owns 49 percent of Mexican carrier TransMex, Mexico's largest domestic truckload carrier. M.S. Carriers, meanwhile, owns 50 percent of Mexican carrier Transportes EASO, which is primarily involved in international freight movements.

The combination will benefit the carriers in several ways, executives noted. "From a customer perspective, there is little overlap among the companies' top accounts, which will present significant cross-marketing opportunities," said Jerry Moyes, CEO and Swift's largest stockholder, in announcing the merger. "In addition, M.S. Carriers has made greater investments in technology, which can be leveraged over the combined revenue base by capitalizing on common hardware and core software systems."

The companies expect to continue M.S. Carriers' operations out of Memphis with existing management and personnel. For the near term, at least, M.S. Carriers will operate independently as the companies focus on cost savings through purchasing economies, lower borrowing rates, and the increased use of lower-priced bulk fuel available at Swift's facilities.

Swift expects to offer approximately 2,000,000 shares of its common stock, and M.S. Carriers expects to offer approximately 300,000 shares of its common stock in public offerings prior to the merger. During the merger, 1.7 shares of Swift common stock will be exchanged for each share of M.S. Carriers' common stock. After completion of the merger, former stockholders of M.S. Carriers will hold approximately 22 percent of Swift's outstanding common stock.

The boards of directors of both companies have approved the definitive merger agreement, which is subject to a number of conditions, including antitrust clearance and stockholder approval.