XPO Reignites Plans to Sell European Transportation Unit: Report

XPO has resumed efforts to sell its European transportation unit, according to a report from Bloomberg. The company had initially paused the plan at the end of 2022 due to weakening capital markets in Europe. However, the board's authorization to divest the unit remained in place, making this renewed push unsurprising. XPO had previously indicated that the sale was "not a matter of if, but when" during its first-quarter earnings call.

The potential divestiture might also involve a public listing on a European stock exchange. This sale would mark the final step in a broader strategy initiated in 2020 to break up XPO’s business units, leaving the company as a focused, less-than-truckload (LTL) carrier.

XPO’s European business generated $3.1 billion in revenue and $167 million in adjusted EBITDA over the 12 months ending June 30. According to an M&A expert speaking anonymously to FreightWaves, the unit could fetch around $2 billion, valued between one time its revenue and 10 times its EBITDA.

XPO has promoted its European business as a leader in several countries, offering a range of services including dedicated truckload, LTL, truck brokerage, managed transportation, last-mile delivery, and freight forwarding. The company’s second-quarter report revealed that the sales pipeline in Europe had increased to a record $1.3 billion, with volume improvements driven by pricing that outpaced inflation.

In an ongoing effort to enhance shareholder value, XPO began dismantling its transportation and logistics conglomerate in late 2020. The company spun off its contract logistics business, GXO (NYSE: GXO), in 2021, followed by the sale of its intermodal unit and the spin-off of its brokerage business, RXO (NYSE: RXO), in 2022.