Spin-off of GXO Logistics from XPO Logistics is a done deal

As expected, the long-awaited spin-off of GXO Logistics from Greenwich, Conn.-based freight transportation services provider XPO Logistics was made official today.

This move was originally announced by XPO in December 2020, when XPO introduced its plan to seek a spin-off of its logistics group as a standalone publicly traded company split it into two separate publicly-traded companies on the New York Stock Exchange—with one focused on global contract logistics [GXO Logistics] and the other focused on less-than-truckload (LTL) and truck brokerage transportation services [XPO Logistics].

At the time of the announced spin-off, the company gave its global contract logistics group the placeholder name NewCo, with the less-than-truckload (LTL) and truck brokerage transportation services group’s placeholder name XPORemainCo. It said NewCo [GXO Logistics], would become the second-largest global contract logistics provider, with around 200 million square feet of warehouse space, upon completion of the spinoff, which an XPO official told LM, at the time, would be complete in the second half of 2021.

“With the timely completion of our spin-off, XPO and GXO are moving forward with powerful momentum as independent public companies,” said Brad Jacobs, chairman and chief executive officer of XPO, in a statement. “I want to thank the many people whose work over the past eight months has made this initiative a reality. We’ve given both businesses a clear line of sight to unlocking their full potential.” 

XPO officials pointed to how, with years of technology-focused investments being a core principle of its growth trajectory, the new GXO will be able to leverage various aspects of what it called the logistics industry’s predominant secular tailwinds, including: the growth in e-commerce and omnichannel retail; fast-growing customer demand for automation and digital capabilities; and a shift toward outsourcing supply chain services.

“GXO will have an undiluted focus on its strategic priorities and blue-chip customer base, with a standalone equity currency to create long-term value for its stakeholders,” the company said.

GXO Logistics will be led by Malcolm Wilson, XPO, CEO, Europe, whom will serve as CEO. Wilson said that the new company’s brand identity captures the qualities that make XPO an industry leader, pointing to the company's ability to deliver faster, leaner, smarter logistics for customers at lower cost, using advanced automation and data science. 

In a recent interview with LM, Wilson explained that GXO had a positive outlook for 2021, with businesses coming back to some type of normalcy, following the depths of the pandemic in 2020.

“What we are seeing as a business is what the pandemic did do was identify a lot of new customers and existing customers of XPO will become GXO customers,” he said. “These companies are seeing just really how critical logistics is to their businesses, which has really fueled this general outsourcing trend. We are seeing many queries from companies looking at outsourcing for the first time, and many queries from existing customers. The market, and our business, is definitely benefitting from a big tailwind of e-commerce, so that is a big trend in our industry right now, and that is here to stay. We were already seeing the move towards e-commerce; it has been happening for years. The volumes we had expected to see in 2025 are being seen here and now today. That big trend of e-commerce is definitely here to stay, and that is great news for GXO. It is one of our core businesses, with e-fulfillment and returns management. That is a real core business for us and one of our big vertical offerings.  Equally, that is driving a lot of automation needs. The reason for that is we all want things sooner, so when we click on an item online and want it tomorrow, or even today, for that matter, that drives a different need in our warehousing solution, as well as a need for more and more technology and automation.”

Separately traded stocks: XPO officials said that the separation was completed through a distribution to XPO stockholders of one share of GXO common stock for every one share of XPO common stock held as of the close of business on the record date for the distribution, July 23, 2021. GXO shares were distributed at 12:01 a.m. Eastern Time on August 2, 2021 in a distribution that is intended to be tax-free to XPO stockholders for U.S. federal income tax purposes.