A Financial and Logistical Analysis of the Merger Between Knight Transportation and Swift Transportation

Open Access
Author:
Salvaggio, Siena
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Robert Alexander Novack, Thesis Supervisor
  • Dr. Brian Spangler Davis, Honors Advisor
Keywords:
  • merger
  • supply chain
  • Knight Swift
  • logistics
  • transportation
Abstract:
The transportation industry is transitioning as the M&A landscape is encouraging megadeals between prominent trucking players. This shift is inviting M&A activity between truckload companies rather than typical acquisitions in the small parcel and LTL sector. Such unprecedented M&A activity is disrupting the industry as major billion-dollar mega companies are forming in the truckload sector. Financial analysis typically occurs as the primary approach for analyzing M&A deals. However, due to the reliance of network integration in the trucking industry, logistical analysis is critical for M&A analysis in this field. With application of the merger between Knight Transportation and Swift Transportation, this thesis evaluates typical financial analysis and its ability to realize synergies of M&A deal between truckload companies. This thesis also provides a logistics analysis framework detailing steps for analyzing network synergies ranging from the supplier base to shareholders’ approval. Through both logistical and financial lenses, this thesis develops methodology for analyzing unprecedented M&A activity in the truckload sector of the transportation industry. By applying the designed logistics framework to the merger between Knight Transportation and Swift Transportation, the thesis concludes logistical success of the specified truckload deal as it optimizes network routes through capitalization of network synergies. Coupled with improved financial metrics in comparison to its’ current competitors, Knight Swift Transportation realizes both financial and logistical synergies through unprecedented M&A activity. However, further analysis of Knight Swift Transportation’s logistical network over the next five years is imperative to conclude overall success of network integration.