Shipping tycoon Sadé signals he'd be open to logistics spinoff

XPO Logistics, Inc. (NYSE: XPO) has announced plans to spin off its logistics segment into a separate publicly traded entity, a move intended to unlock equity value. The spin-off, structured as a tax-free transaction for XPO shareholders, will result in two distinct companies: XPORemainCo, focused on less-than-truckload (LTL) and truck brokerage services, and second-largest contract logistics provider.

The decision follows a comprehensive review of strategic alternatives and is based on the belief that separating the two segments will allow each to better align with investor expectations and industry valuation benchmarks. XPORemainCo will retain XPO’s transportation operations, including its third-largest LTL business in North America and its leading truck brokerage platform. NewCo will inherit the logistics operations, including warehousing, e-commerce fulfillment, and cold-chain logistics, with 200 million square feet of storage space across 27 countries.

Brad Jacobs, XPO’s chairman and CEO, will continue to lead XPORemainCo and will serve as chairman of NewCo’s board, while Troy Cooper remains president. The spin-off is expected to be completed in the second half of 2021, pending regulatory approvals, debt refinancing, and final board approval.

Analysts suggest that the separation could address the so-called “conglomerate discount” that has historically affected XPO’s valuation, as pure-play logistics companies trade at higher multiples. The move is also expected to improve each company’s ability to pursue M&A opportunities, attract specialized talent, and tailor capital allocation.