Union Pacific OKs Trucking Sale
DALLAS (AP) _ Union Pacific’s board of directors has approved the public sale of trucking subsidiary Overnite Transportation Co. The proceeds will be used to pay off debt.
``With the Overnite sale, we can devote all of our resources to making the railroad the industry leader in customer satisfaction, cost effectiveness and reliability,″ Union Pacific chairman and chief executive Dick Davidson said Wednesday.
The Wall Street Journal reported Monday that the trucking unit could sell for about $700 million, less than half of what the railroad originally paid in 1986.
Union Pacific bought Richmond, Va.-based Overnite for $1.6 billion with hope that the truck line would be an effective highway transportation partner for the rail system. But Davidson has said the two companies didn’t mesh as well as expected.
Company officials anticipate the public offering to occur in the third quarter. The company also expects to take a significant second-quarter loss as a result of the sale.