CH Robinson Worldwide has agreed to acquire truck broker RXO for about $5.8 billion in cash and stock, creating a logistics company with an enterprise value of more than $25 billion as the third-party logistics industry undergoes a wave of consolidation.
The deal sent RXO shares about 24% higher at market open on Monday, while CH Robinson shares fell roughly 9% as investors weighed the strategic benefits against dilution and additional debt.
Under the terms, CH Robinson values RXO at $30.25 a share, representing a 29% premium to RXO’s Friday closing price of $23.38.
RXO shareholders will receive $17.25 in cash and 0.0856 C.H. Robinson shares for each RXO share.
Deal expands truck brokerage footprint
The combined company will integrate RXO, a technology-enabled truck brokerage business, primarily into C.H. Robinson’s North American Surface Transportation, or NAST, division.
The unit accounts for more than two-thirds of C.H. Robinson’s revenue.
The acquisition is expected to expand C.H. Robinson’s last-mile delivery capabilities in the US while giving it greater scale to compete for large corporate customers.
The move would also strengthen its position in the highly competitive truck brokerage market, where scale and technology are increasingly important to margins and customer retention.
CH Robinson CEO Dave Bozeman said the deal would allow the company “to create a more scaled, resilient North American third-party logistics provider.”
The company expects the transaction to generate $300 million in net run-rate cost synergies within two years of closing.
It also expects the deal to become accretive to adjusted earnings per share within nine months of completion and to deliver mid-teens adjusted EPS accretion in 2028.
Investors weigh dilution and debt
The financial structure of the transaction is likely to remain a key focus for CH Robinson investors.
About 43% of the total consideration will be paid in CH Robinson stock, creating immediate dilution, while the cash portion will be financed through new debt.
CH Robinson has secured a fully underwritten commitment for a bridge facility from Morgan Stanley Senior Funding to finance the cash consideration.
The company expects productivity gains and stronger cash generation to support rapid deleveraging.
It is targeting net debt to LTM adjusted EBITDA of 1.75x to 2.25x by the end of 2028 while retaining flexibility to invest in growth.
RXO shareholders will own about 11% of the combined company after the transaction closes.
RXO’s largest shareholder, Orbis Investments, backed the deal.
Adam R. Karr, president and portfolio manager at Orbis, said the firm “fully supports this transaction.”
The merger was unanimously approved by both companies’ boards.
It still requires regulatory clearance and approval from RXO shareholders. MFN Partners LP, which owns about 17% of RXO, has agreed to vote in favor of the transaction.
Logistics sector sees further consolidation
The transaction is expected to close in the first half of 2027 and comes amid increasing consolidation across the third-party logistics industry.
Earlier this year, FedEx agreed to sell its FedEx Supply Chain subsidiary to French shipping company CMA CGM Group for an enterprise value of $1.4 billion.
The business is expected to be folded into CMA CGM’s CEVA Logistics unit.
For CH Robinson, the RXO acquisition represents a push to gain scale and broaden its service offering as logistics providers seek greater efficiency and stronger positions with large customers.
The company will need to demonstrate that the expected cost savings and revenue benefits can offset the near-term dilution and higher leverage created by the transaction.