FedEx has approved the long-planned separation of its freight division, paving the way for FedEx Freight to begin trading as an independent company on the New York Stock Exchange next month.
The company said its board of directors had authorised the distribution of 80.1% of FedEx Freight shares to existing FedEx shareholders through a pro rata dividend arrangement.
The separation is scheduled to take effect on 1 June 2026, when FedEx Freight is expected to begin trading on the New York Stock Exchange under the ticker symbol “FDXF”.
Under the terms of the deal, shareholders recorded at the close of business on 15 May will receive one share of FedEx Freight stock for every two shares of FedEx common stock they hold.
Investors entitled to fractional shares will instead receive cash payments.
FedEx to retain minority stake
FedEx said it would retain a 19.9% stake in the newly separated freight company immediately following the spin-off.
The logistics group plans to dispose of the remaining shares within two years through debt repayment arrangements, shareholder distributions or share exchanges.
The company added that the distribution is expected to be tax-free for US federal income tax purposes.
R. Brad Martin, who is set to become chairman of the FedEx Freight board after the separation, described the move as a major milestone.
“Today’s announcement is an important step as we prepare for a seamless separation of the FedEx Freight business on 1 June,” he said.
“As separate organisations, FedEx and FedEx Freight will build on their respective industry leadership positions to serve customers with excellence, while creating value for their stockholders.”
Temporary trading arrangements announced
FedEx also outlined temporary trading arrangements ahead of the spin-off.
Between 27 May and 29 May, FedEx shares will trade in two separate NYSE markets: a regular market carrying rights to receive FedEx Freight shares, and an “ex-distribution” market without those rights.
A separate “when-issued” market for FedEx Freight shares will also operate during that period under the symbol “FDXF WI”, allowing investors to trade future entitlements before the official listing date.
Freight division to pay $4.1bn dividend
Ahead of the separation, FedEx Freight will pay an estimated $4.1bn (£3.1bn) cash dividend to FedEx.
The payment will be funded through proceeds from a $3.7bn senior notes offering completed earlier this year, together with borrowings from a delayed-draw loan facility.
The restructuring forms part of a broader strategic overhaul at FedEx as the company seeks to streamline operations and sharpen its focus on core parcel delivery and logistics services.
FedEx to redeem European notes
Separately, FedEx announced plans to redeem all outstanding €354.9m (£300m) of its 1.3% notes due in 2031.
The redemption is scheduled for 28 May 2026 and will be handled through financial clearing systems operated by Euroclear and Clearstream.
The company said bondholders would receive either the full principal value or a higher market-based calculation tied to government bond yields, alongside accrued interest payments.
Analysts say the separation of FedEx Freight could allow investors to value the company’s trucking and logistics operations independently, at a time when the global freight and parcel delivery sectors continue to face shifting demand patterns, supply chain pressures and economic uncertainty.