FedEx announced it will spin off its shipping business into a new publicly traded company as it aims to bolster its business amid weak demand.
The parcel delivery group, which is considered a global economic growth leader due to the wide range of items it ships, said it expects the separation to allow for more “tailored operational execution” and “tailored investment and capital allocation strategies” to serve “sophisticated growth.” The “needs” of less-truckload (LTL) markets, which transport freight or cargo weighing more than 150 pounds.
“This is the right time to pursue separation as we respond to the unique dynamics of the LTL market,” said Raj Subramaniam, FedEx President and CEO. “Through this process, we will unlock value for our shipping business and position FedEx to create greater shareholder value.”
FedEx shares jumped 10.2 percent in after-hours trading in New York.
