RXO Inc. (NYSE:RXO) shares rose more than 18.5% in pre-market trading on Monday after C.H. Robinson Worldwide Inc. (NASDAQ:CHRW) agreed to acquire the transportation services company in a cash-and-stock transaction valued at $5.8 billion.
Under the agreement, RXO shareholders will receive $17.25 in cash and 0.0856 C.H. Robinson shares for each RXO share held, representing total consideration of $30.25 per share.
The offer represents a 27% premium to RXO’s 90-day volume-weighted average share price and a 29% premium to its closing price on Friday.
Following completion, RXO shareholders are expected to own approximately 11% of the combined company, which will have an enterprise value of more than $25 billion.
Shareholders Offered Cash or Stock Elections
RXO shareholders will also be able to elect to receive either $30.25 per share entirely in cash or 0.1992 C.H. Robinson shares for each RXO share.
The elections will be subject to proration procedures intended to maintain the overall transaction consideration at approximately 57% cash and 43% stock.
C.H. Robinson said the acquisition will combine its global forwarding operations with RXO’s North American brokerage, expedited and last-mile services.
RXO, based in Charlotte, North Carolina, provides asset-light transportation services and is a Fortune 1000 company.
C.H. Robinson Targets $300 Million in Cost Synergies
C.H. Robinson expects to generate approximately $300 million of net run-rate cost synergies within two years of completing the acquisition.
The company expects the transaction to be accretive to adjusted earnings per share within nine months after closing and to provide mid-teens percentage accretion to adjusted EPS in 2028.
The cash portion of the acquisition will be financed with new debt. C.H. Robinson has secured a fully underwritten bridge financing commitment from Morgan Stanley Senior Funding Inc.
C.H. Robinson expects to reduce leverage to its target range of 1.75 times to 2.25 times net debt to adjusted EBITDA by the end of 2028. The company will pause share repurchases until it reaches that target range.
MFN Partners LP, which owns approximately 17% of RXO’s outstanding shares, has agreed to vote in favour of the transaction.
The boards of both companies unanimously approved the acquisition. Completion is expected during the first half of 2027, subject to regulatory clearance and approval from RXO shareholders.