CH Robinson falls 11 percent after announcing US$5.8bn RXO acquisition

CH Robinson shares fell 10.74 percent after announcing its US$5.8bn acquisition of RXO, while RXO shares rose more than 20 percent on the deal premium. RXO shareholders will receive cash and CH Robinson stock, with the target’s shareholders expected to own about 11 percent of the combined company. CH Robinson is also taking on additional debt, including a US$4.5bn bridge facility. CH Robinson expects US$300m in annualised cost synergies within two years, with the deal expected to be EPS accretive within nine months and deliver mid-teens adjusted EPS accretion in 2028. CH Robinson Worldwide shares fell 10.74 percent on Monday after the logistics company announced a US$5.8bn agreement to acquire truck brokerage company RXO. RXO shares rose more than 20 percent following the announcement as investors responded to the acquisition premium. Under the agreement, RXO shareholders will receive US$17.25 in cash and 0.0856 CH Robinson shares for each RXO share. Shareholders can also elect to receive all-cash or all-stock consideration, subject to proration. RXO shareholders are expected to own approximately 11 percent of the combined company once the transaction is completed. CH Robinson expects the combination to generate approximately US$300m in annualised net run-rate cost synergies within two years of closing. The company expects the transaction to be adjusted earnings per share accretive within nine months and to generate mid-teens adjusted EPS accretion in 2028. The deal will be partly financed through additional debt, with CH Robinson securing a US$4.5bn bridge facility to fund the cash component. The combined company is expected to have an enterprise value of more than US$25bn. RXO will be integrated primarily into CH Robinson’s North American Surface Transportation business. The combination will bring together truck brokerage and managed transportation operations, while adding RXO’s expedited and last-mile capabilities. CH Robinson said the transaction will increase scale across its transportation network and provide opportunities to improve productivity through its Lean AI operating model. The company plans to suspend share buybacks until net debt-to-LTM adjusted EBITDA returns to a target range of 1.75x to 2.25x. It is targeting that range by the end of 2028. The transaction is expected to close in the first half of 2027, subject to regulatory approval and approval by RXO shareholders.