C.H. Robinson Worldwide, a Fortune 1000 provider of transportation solutions, announced on October 5 that it will acquire RXO, a last-mile logistics provider.

The acquisition will be a stock-and-cash transaction valued at $5.8 billion and will create a combined company with an enterprise value of over $25 billion.

In the announcement, C.H. Robinson said it expects to realize approximately $300 million of net run-rate cost synergies within two years post-close.

“This transaction is a natural next step in our transformation, allowing us to create a more scaled, resilient North American third-party logistics provider positioned to offer exceptional customer service and redefine the future of our industry,” said Dave Bozeman, C.H. Robinson's president and CEO, in a statement. “Like C.H. Robinson, RXO is a customer-focused company with expertise and talent that will allow us to expand our capabilities to better support customers of all sizes on their most complex challenges.”

C.H. Robinson offered the following strategic and financial benefits of the acquisition. 

• Unlocks compelling cost synergy opportunities through C.H. Robinson’s Lean AI operating model – C.H. Robinson expects to unlock significant productivity improvements and drive operating margin expansion as it applies its Lean AI operating model to RXO’s business. The transaction is expected to deliver approximately $300 million of net run-rate cost synergies within two years following the transaction close, through cost-to-serve opportunities, operating efficiencies, shared-services savings and third-party spend optimization. The anticipated synergies will allow the combined company to increase operating leverage and drive significant shareholder value creation. The acquisition will also significantly expand C.H. Robinson’s proprietary datasets, enhancing the speed and precision of its AI-driven sales, matching and procurement capabilities.
• Increases scale in a large and fragmented market – The addition of RXO will improve C.H. Robinson’s network density and expand its capabilities, enhancing penetration across verticals and increasing volumes. The combined company’s complementary platform and diversified customer exposure will increase market visibility and enhance its ability to drive growth through market cycles.
• Diversifies and strengthens offerings to support customers’ end-to-end needs – The transaction will bring together C.H. Robinson’s global, multi-modal solutions with RXO’s capabilities in North American brokerage, expedited and last mile to deliver more tailored solutions, creating opportunities to deepen relationships, increase wallet share and win new enterprise customers. The companies’ complementary commercial capabilities and diverse customer base will also create compelling cross-selling opportunities.