C.H. Robinson to Acquire RXO in $5.8 B Deal, Offering Holders Cash, Stock Options and Securing $4.5 B Bridge Funding

CHRW agreed to acquire RXO in a cash-and-stock transaction with an implied equity value of $5.8 billion, creating a combined company with an enterprise value of more than $25 billion. The standard consideration is $17.25 in cash plus 0.0856 C.H. Robinson shares for each RXO share, or $30.25 per share, a 29% premium to RXO's closing price on Friday, October 2, and a 27% premium to its 90-day volume-weighted average price. C.H. Robinson's stock leg is valued off its 16-day VWAP of $151.88.

RXO holders can elect all cash at $30.25, all stock at 0.1992 C.H. Robinson shares, or the standard mix. Elections are subject to proration so that in aggregate about 57% of the consideration is paid in cash and 43% in shares, and RXO stockholders are expected to own 11% of the combined company. The cash portion will be funded with new debt, and C.H. Robinson has a fully underwritten commitment from Morgan Stanley Senior Funding for a 364-day senior unsecured bridge term loan of up to $4.5 billion. According to RXO's 8-K, the bridge also covers refinancing RXO's existing credit facility and fees, and its commitments shrink as permanent debt is raised.

C.H. Robinson expects about $300 million of net run-rate cost synergies within two years of closing, from cost-to-serve opportunities, operating efficiencies, shared-services savings and third-party spend optimization. It expects the deal to be accretive to adjusted EPS within nine months of closing and mid-teens accretive in 2028, plans to de-lever to its 1.75x to 2.25x net debt to adjusted EBITDA target range by the end of 2028, and will pause share repurchases until it gets there. RXO will be integrated primarily into C.H. Robinson's NAST division.

The market reaction was split. RXO shares rose about 21% on Monday, closing near $28.39 according to the Motley Fool, below the $30.25 headline value, while C.H. Robinson shares fell more than 13%, which one headline summarized as investors disliking the deal. RXO would owe C.H. Robinson a $175 million termination fee in specified circumstances. Closing is expected in the first half of 2027, subject to regulatory approval and an RXO stockholder vote, so the points to watch are antitrust review, the election and proration outcome, how much of the bridge is termed out with bonds or term loans, and early evidence on the synergy target.