YRC keeps ABF in its acquisition sight
Earlier this year, YRC approach Arkansas Best about the possibility of a acquiring ABF Freight System, according to a recently released U.S. Securities and Exchange Commission filing
, but was turned down by the smaller less-than-containerload carrier.
After receiving the proposal, details of which have not been disclosed, ABF officials told the other carrier “that considering a proposal was not appropriate at that time” due to ongoing labor negotiations, according to the filing. ABF and YRC have had no discussions since then, but ABF and the Teamsters union reached a tentative five-year contract on Monday.
In a separate statement, YRC confirmed it had floated an initial merger proposal by Arkansas Best Corp. According to YRC, Judy McReynolds, ABF’s chief executive officer, discussed the proposal with the board and found the timing wasn’t right for the deal.
James Welch, YRC's chief executive officer, is still optimistic, however, a deal could come in the future.
"Our board and management believed then and believes now that the combination of Arkansas Best and YRCW would be in the best interests of all employees, customers and shareholders of both companies,” he stated. “We remain committed to continuing the great strides we have made at YRCW."
YRC is in the midst of increasing network density and making other infrastructure adjustments to save the company $25 million to $30 million annually. On May 3, it reported a large first-quarter jump in income, bringing the company its first positive operating income in six years. Before-tax earnings increased by more than $15 million, year over year, but operating revenue dropped by 2.7 percent.
At the time, Welch said YRC still has “significant opportunity” for improvements and will be looking to grow the business throughout the year. - Jon Ross