EXHIBIT 99.1
Media Contact: Shirlee M. Clark
901-818-7463
Investor Contact: J. H. Clippard Jr.
901-818-7468
FOR IMMEDIATE RELEASE
FedEx Acquires American Freightways to Extend Reach
In Fast-Growing Regional Freight Market
American Freightways And Viking Freight Create New LTL Powerhouse
MEMPHIS, Tenn., Nov. 13, 2000 - FedEx Corporation (NYSE: FDX) and regional
freight carrier American Freightways Corporation (Nasdaq: AFWY) today jointly
announced an agreement for FedEx to acquire American Freightways for $28.13 per
share, or approximately $1.2 billion, including assumed debt, payable in cash
and FedEx stock. This transaction will be immediately accretive to FedEx
earnings.
The acquisition will allow FedEx Corp., also the parent company of Viking
Freight, to extend its reach by expanding its reliable, next-day regional
less-than-truckload (LTL) freight service with all-points coverage in 48
states. The joint revenues of American Freightways and Viking will create the
second-largest regional LTL freight unit in the United States with revenue of
more than $1.6 billion.
Leveraging 'A Perfect Strategic Fit'
"This acquisition is a perfect strategic fit that will give FedEx a unique
competitive advantage, generating incremental volume and revenue that neither
business could capture as a stand-alone," said Frederick W. Smith, Chairman,
President and Chief Executive Officer of FedEx Corp. "These two networks
complement each other geographically, matching Viking's leadership in the West
with American Freightways' strong presence throughout the Midwest, South and
Northeast. Extending our FedEx network also gives our customers just what they
need in today's high-speed, high-tech New Economy--greater choice and
flexibility in creating complete supply chain solutions. Plus, it's a great fit
for our people, who absolutely, positively provide the industry's most reliable
customer service.
"The American Freightways acquisition also fits into the FedEx business
strategy, with companies that operate independently, focused on distinct market
segments, yet compete collectively as a single-source provider for all
transportation, logistics and e-commerce needs," Smith added. "We believe this
business model offers superior benefits, without the inherent trade-offs of a
one-size- fits-all approach. Our complete portfolio of independent FedEx
networks powerfully demonstrates that the whole is greater than the sum of its
parts."
Creating a Competitive Service Advantage
The primary focus of this new FedEx LTL freight group is on intra-regional
transportation, with day-definite delivery in one to two business days;
however, customer shipments may also move
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across regions between the two networks. Shipments originating with either
American Freightways (AF) or Viking will move anywhere in the country in up to
four days as information systems become integrated. That represents a
competitive edge over national long-haul LTL carriers, which typically take
five to seven days to move freight across the country. In addition, AF and
Viking will offer distinct advantages over stand-alone regional LTL companies,
with direct pickup and delivery, wider geographic coverage and greater market
density.
Each company's sales team will sell bundled multi-regional LTL services. Over
time, the entire FedEx sales force will also be trained to cross-sell LTL
services to FedEx Express and FedEx Ground customers, which should generate
incremental volume and revenue in other FedEx transportation segments.
Viking and AF domestic service areas overlap only in Alaska, Arizona, Colorado,
Hawaii and New Mexico, and in Calexico, Calif., and El Paso, Texas. Neither
company currently serves Montana or Wyoming. AF also serves the Caribbean,
Guam, Puerto Rico and South America, and both companies serve Canada and
Mexico.
Benefiting Shareholders, Customers and Employees
"For American Freightways, joining forces with FedEx is a win-win situation for
our shareholders, customers and employees," said Sheridan Garrison, Chairman
and Founder of American Freightways. "Our shareholders would receive
approximately a 61% premium to our most recent market price which we believe
represents a significant value to them. Our customers win with the combination
of AF and Viking, which will create a flexible, regional LTL network that
provides next-day or second-day service within regions, with the option to move
shipments seamlessly on a multi-regional basis. Our AF associates also win with
greater long-term opportunities as part of the FedEx family."
Garrison will become the thirteenth member of the FedEx Corporation Board of
Directors and will serve as Chairman Emeritus and Founder of American
Freightways.
Tom Garrison will continue as President and CEO of American Freightways and
will report to Douglas G. Duncan, who will become President and CEO of a new
FedEx LTL freight group overseeing both AF and Viking operations. Also
reporting to Duncan will be Tilton Gore, currently a Viking Senior Vice
President, who will succeed Duncan as President and CEO of Viking Freight.
"This acquisition will expand the FedEx LTL freight presence much faster than
growing Viking eastward, and each company can continue to leverage the regional
strength of its brand name while operating as part of the global FedEx family,"
Duncan said. "Although there are no plans to merge these two profitable
companies, we do plan to explore all opportunities for synergies."
For example, both companies previously relied on third-party transportation
services to extend their coverage areas. "By joining forces, this new FedEx LTL
freight group can sell a more complete package of multi-regional services and
capture business that previously went to the competitors," Duncan added.
Expanding in the Fast-Growing LTL Market
Industry experts predict the regional LTL market will grow by nearly 10 percent
per year from 2000 to 2004. LTL carriers deliver bulk freight shipments
weighing over 150 pounds that can be moved entirely by truck and still meet
day-definite delivery requirements.
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American Freightways and Viking Freight will operate independently under their
own brand names as part of the FedEx family, which includes approximately
200,000 employees and contractors at FedEx Express, FedEx Ground, FedEx
Logistics, FedEx Custom Critical, and FedEx Trade Networks. AF is based in
Harrison, Ark., with more than 17,000 associates in 40 states. Viking is based
in San Jose, Calif., and employs about 5,400 in 11 western states.
FedEx Corp. and American Freightways stated that they were both comfortable
with the First Call consensus earnings estimates for their current quarters.
A conference call for media and financial analysts will be held at 10:00 a.m.
(EST) on November 13, 2000, and will be webcast at
www.fedex.com/us/investorrelations. A replay of the conference call webcast
will be posted on the web site following the call and will remain available for
approximately two weeks.
About the Transaction
Both boards of directors have approved the transaction, and the companies have
signed a definitive agreement. The $1.2 billion purchase includes $950 million
in a half-cash, half-stock transaction and the assumption of approximately $250
million in American Freightways debt.
FedEx will make a cash tender offer for up to 50.1% of the outstanding shares
of American Freightways Corporation (AF) at a price of $28.13 per share.
Following completion of the tender offer, AF will merge into a newly created
subsidiary of FedEx Corporation, pursuant to which each AF common share will be
converted into shares of FedEx Corporation common stock having a value of
$28.13 per share.
The transaction is subject to the approval of AF shareholders and other
customary conditions, including Hart-Scott-Rodino clearance. The Merger
Agreement also includes customary provisions relating to the fiduciary duty of
directors. AF shareholders who own in the aggregate 37% of the outstanding AF
shares have agreed to vote their shares in favor of the merger. The companies
expect the tender offer to be completed in mid-December and the merger to be
completed in the first quarter of 2001. The companies expect the merger to be
tax-free to AF shareholders who receive FedEx Corporation stock.
"We have arranged a $750 million line-of-credit facility with Chase Bank for
the cash portion of the transaction and for refinancing American Freightways'
debt, should we elect to do so," said Alan B. Graf Jr., Executive Vice
President and CFO of FedEx Corp. "We anticipate that Moody's and S&P will
reaffirm our current debt rating, which is Baa2 and BBB, respectively. We have
sufficient shares of treasury stock to complete the second half of the
transaction, which is an exchange of common shares of stock. As for our
financial reporting, we plan to report separate results for the FedEx LTL
freight group beginning with the release of fiscal third-quarter earnings."
Certain statements contained in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating to management's views with respect to
future events and financial performance and the proposed FedEx acquisition of
AF. Such forward-looking statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ materially from
historical experience or from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but are
not limited to, economic and competitive conditions in the markets where FedEx
operates, matching capacity to volume levels and other uncertainties detailed
from time to time in press releases and filings with the SEC by FedEx and its
subsidiaries.
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ALL AF STOCKHOLDERS SHOULD READ THE TENDER OFFER STATEMENT CONCERNING THE
TENDER OFFER FOR SHARES OF AF COMMON STOCK THAT WILL BE FILED BY FEDEX
CORPORATION WITH THE SEC AND MAILED TO AF STOCKHOLDERS. THE TENDER OFFER
STATEMENT (INCLUDING THE OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND
OTHER OFFER DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION THAT AF STOCKHOLDERS
SHOULD READ CAREFULLY BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR
SHARES. AF stockholders will be able to obtain the tender offer statement, as
well as other filings containing information about FedEx Corporation and AF,
without charge, at the SEC's Internet site (http://www.sec.gov). In addition,
copies of the tender offer statement and other documents filed with the SEC by
FedEx Corporation may be obtained for free from FedEx by directing a request to
FedEx Corporation, 942 S. Shady Grove Road, Memphis, Tennessee 38120,
Attention: Investor Relations, telephone: (901) 818-7200.
ALL AF STOCKHOLDERS SHOULD READ THE PROXY STATEMENT/ PROSPECTUS CONCERNING THE
MERGER AND RELATED TRANSACTIONS THAT WILL BE FILED WITH THE SEC AND MAILED TO
AF STOCKHOLDERS. THE PROXY STATEMENT/ PROSPECTUS WILL CONTAIN IMPORTANT
INFORMATION THAT AF STOCKHOLDERS SHOULD READ CAREFULLY BEFORE MAKING ANY
DECISION REGARDING THE MERGER AND RELATED TRANSACTIONS. AF stockholders will be
able to obtain the proxy statement/prospectus, as well as other filings
containing information about FedEx Corporation and AF without charge, at the
SEC's Internet site (http://www.sec.gov). In addition, the proxy
statement/prospectus and other documents filed with the SEC by AF may be
obtained for free from American Freightways Corporation, 2200 Forward Drive,
Harrison, Arkansas 72601, Attention: Investor Relations, telephone: (870)
741-9000.
FedEx and AF and their officers and directors may be deemed to be participating
in the solicitation of proxies from AF's stockholders with respect to the
merger and related transactions. Information regarding the officers and
directors of FedEx is included in the FedEx Proxy Statement for its 2000 Annual
Meeting of Stockholders filed with the SEC on August 14, 2000. Information
regarding the officers and directors of AF is included in the AF Proxy Statement
for its 2000 Annual Meeting of Stockholders filed with the SEC on March 11,
2000. These documents are available free of charge at the SEC's Internet site
(http://www.sec.gov) or by contacting FedEx or AF at the addresses set forth
above.
About FedEx Corp.
With annual revenues of $19 billion, FedEx Corp. is the premier global provider
of transportation, logistics, e-commerce and supply chain management services.
The company offers integrated business solutions through a network of
subsidiaries operating independently, including FedEx Express, the world's
largest express transportation company; FedEx Ground, North America's second
largest provider of small-package ground delivery service; FedEx Logistics, an
integrated logistics, technology and transportation-solutions company; FedEx
Custom Critical, the world's largest provider of expedited, time-critical
shipments; and FedEx Trade Networks, a provider of customs brokerage,
consulting, information technology and trade facilitation solutions. More than
2.5 million customers are connected electronically through the FedEx
information network and approximately two-thirds of its U.S. domestic
transactions are now handled online.
About American Freightways Corporation
American Freightways Corporation is a scheduled, for-hire carrier of
less-than-truckload shipments of general commodities, presently serving direct
all points in 40 contiguous U.S. states. Through partnerships, AF also serves
Alaska, Canada, Caribbean Islands, Central America, Hawaii, Mexico, Puerto Rico
and South America. It employs 17,200 associates operating over 28,300 pieces of
revenue equipment from a network of 265 customer centers and handles about
46,000 shipments per day. For more information, visit their web site at
www.AF.com.
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