Why Knight is taking over Swift...Size matters, but management matters even more

While Swift has four times more trucks than Knight, the market has valued them about the same – why?
  • Swift has lots of debt // Knight  has none
  • Swift’s operating ratio is higher than Knight’s
They called it a merger but here is the key – Knight’s management will run the new entity…
The combined business:
  • 23,000 truck-tractors and 28,000 employees
  • Maintain separate branded operations but will work under a holding company structure that adds new corporate controls
  • Knight has effective board control
Since Schneider just went public and has cash to grow, the new entity should have the size and discipline to be profitable.
Oil is nearly at $53!