On August 10 this year, there was news that Omni Logistics and Forward Air, two well-known old freight forwarding and logistics companies in North America, would undergo mergers and acquisitions. If these two companies choose to merge, the target price of this merger and acquisition will be as high as 3.2 billion US dollars. If this merger is ultimately successful, the new company that merges these two companies is very likely to become the leader of the entire industry. However, just two months after this news, there is new news. On the afternoon of October 31, U.S. time, Omni Logistics filed a lawsuit in the Delaware court, pointing out that Forward Air had unilaterally breached the contract, so it requested Forward Air to implement the previously signed merger and acquisition agreement.
The merger deal between Omni Logistics and Forward Air was announced on August 10 with an initial price tag of $3.2 billion. According to information announced at the time, Forward and Omni will each contribute their operating assets to the newly formed partnership, which is a subsidiary of Forward. Certain Omni shareholders will hold a financial interest in the combined entity through the newly formed partnership. When the transaction closes, Omni shareholders will own 37.7% of the combined company. The announcement also stated that it was also revealed at the time that the transaction had been approved by the boards of directors of the two companies and was expected to be completed in the second half of 2023. But now, Forward’s shareholders and some customers are expressing concerns about the deal. Forward’s shareholders asked the court to issue a restraining order on the transaction.
Forward shareholders have therefore questioned many aspects of the deal, including the strategic fit, the deal price, the debt leverage needed to fund it, and voting and control rights. When Omni Logistics filed a lawsuit in the Delaware court on Tuesday local time, it also asked the court to confirm that it had complied with all obligations under the merger agreement. As a result, Forward challenged the prosecution. Forward must be very dissatisfied with Omni’s prosecution and have strong opinions about it.
At the same time, Omni wrote an open letter to Forward shareholders hoping that they can complete the previously announced merger. Omni said that this type of merger is a strong support for both parties because it is the result of a powerful combination. Omni has many new plans for the merger, such as the launch of its unique Omni Forward Air business. Most of the businesses after the merger of these two leading companies will have very good results. Meanwhile, Omni noted that Forward Air’s customers have had similar reactions. Their performance has also grown since the merger was announced on August 10. In other words, this merger is very optimistic for the market and has brought positive growth in performance to both companies. Therefore, the impact of the merger on both companies is positive, so Omni hopes that Forward can fulfill its commitments, which will benefit both parties.
Omni Logistics and Forward Air are both well-known companies in the industry. The business volume of the two companies is already large. For over 40 years, Forward has grown to become the leading provider of ground transportation and related shipping services in the North American air cargo and expedited LTL markets. The depth and breadth of Forward’s transportation service portfolio continues to grow to meet the diverse transportation needs of its customers. Omni Logistics is a global intermodal transportation provider providing air, sea and ground services. As one of the world’s leading privately held third-party logistics providers, Omni Logistics is focused on eliminating supply chain inefficiencies and providing low-cost solutions to approximately 7,000 companies worldwide. There is no final result yet as to whether this powerful merger will eventually come to fruition. But there is no doubt that this merger will have a huge impact on the industry.
