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Shares in Swift Transportation Co (NYSE:SWFT) and Knight Transportation (NYSE:KNX) were both driven higher in pre-market trading on Monday as the two trucking giants unveiled plans to merge.
The all-stock transaction will combine two of the biggest trucking operators in the US, creating a US$5bn company in the process.
Under the terms of the deal, each Swift share will convert into 0.72 shares of Night-Swift through a reverse stock split. Each Knight share will be exchanged for one Knight-Swift share.
The deal values each Swift share at US$22.07 – a 10% premium to last week’s closing price.
Assuming the deal go through as planned, Swift shareholders will own around 54% of the combined company, with Knight stockholders holding the remaining 46%.
Before today’s proposed merger, the previous biggest deal in the trucking industry was XPO Logistics Inc’s (NYSE:XPO) US$3bn acquisition of Con-way back in 2015.
Story by ProactiveInvestors