TRUCKING INDUSTRY Roadway to keep headquarters in Akron after buyout by Yellow

ASSOCIATED PRESS
Trucking giant Yellow Corp. on Tuesday agreed to buy rival Roadway Corp. for $966 million in cash and stock, a large premium in a deal that would further consolidate an industry plagued by bankruptcies in recent years.
Under the terms of the deal, Overland Park, Kan.-based Yellow will also assume $140 million in Roadway debt and Roadway will become a unit within the newly named Yellow-Roadway Corp.
Both companies are less-than-truckload carriers, meaning they consolidate freight from multiple customers, but Yellow CEO Bill Zollars said the brands might specialize in different things over time.
Despite the weak economy, the trucking sector benefited in the past year from the September collapse of Consolidated Freightways, which filed for Chapter 11 and liquidated its assets. That allowed other companies to snap up market share.
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 economic downturn.
In the year ending March 31, Yellow and Roadway had combined revenue of nearly $6 billion. Once combined, the companies said they expect to save $45 million by the end of their second year together.
James D. Staley, currently president and CEO of Roadway, will be in charge of the combined company's Roadway unit, which will keep its headquarters in Akron.
The deal values Roadway at $48 a share, a 60 percent premium above its Monday's closing price.