All-weather M&A maven’s legacy is hit by a storm
CHRW•C.H. Robinson agreed to acquire RXO for $5.8 billion, with RXO investors receiving $17.25 per share in cash and 0.0856 shares of C.H. Robinson stock. RXO shares fell 15%, and analysts expect it to post a 2026 operating loss.
1. RXO faces industry pressure
RXO, spun off from XPO in 2022, has faced volatile freight demand, shifting consumer habits and new trucking companies followed by bankruptcies. Spot flatbed truck rates rose from about $2.20 per mile to nearly $3.20 in July before falling back, while the Cass Freight Index remains depressed and diesel costs have risen.
2. Deal return questioned
C.H. Robinson is betting that its AI-focused operating model can improve RXO’s efficiency, citing lower gross profit per worker at RXO and projecting $300 million in synergies. Combining those savings with RXO’s expected 2027 rebound to $120 million in operating profit implies a 6% return after tax, while C.H. Robinson has focused on 2028 expectations.
3. Jacobs’ ventures tested
Brad Jacobs launched his logistics roll-up in 2011 and spun RXO off from XPO in 2022. His newer company, QXO, has also seen estimates fall as high interest rates and economic disruption weigh on housing.
