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Knight Transportation Inc. and Swift Transportation are merging to create what they say will be the trucking industry’s largest full truckload company: Knight-Swift Transportation Holdings Inc.

Swift ranks No. 6 and Knight ranks No. 29 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

The all-stock transaction combines under common ownership two long-standing industry leaders, creating a truckload transportation company with $5 billion in annual revenue with a strong presence in dry van, refrigerated, dedicated, cross-border Mexico and Canada, and a significant presence in brokerage and intermodal. The holding company structure will enable the Knight and Swift businesses to operate under common ownership and share best practices, while maintaining distinct brands and operations. The company will remain headquartered in Phoenix, Ariz., operating with approximately 23,000 tractors, 77,000 trailers, and 28,000 employees.

Under the terms of the definitive agreement each Swift share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split. Each share of Knight will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift is $22.07. Upon closing of the transaction, Swift stockholders will own approximately 54% and Knight stockholders will own approximately 46% of the combined company.

The number of combined company shares expected to be outstanding after closing and the combined net debt of Swift and Knight as of Dec. 31, 2016, the combined company would have an implied enterprise value of approximately $6 billion.

Knight Executive Chairman Kevin Knight said: “In Knight’s 26-year history, we have built a truckload company with industry-leading margins and investment returns. When the two companies began discussions, we had four goals in mind: create a company with the best strategic position in our industry; identify significant realizable synergies that would create value for both sets of stockholders; create a business that over the long-term will operate at Knight’s historical margins and financial returns; and agree on a leadership and corporate governance framework that will benefit all stakeholders. I am confident we have achieved those goals.”

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