Omni Logistics Sues Forward Air Corp. in $3.2 Billion Takeover Dispute

Dallas-based Omni Logistics has taken legal action against Tennessee-based Forward Air Corp. in the Delaware Court of Chancery, seeking enforcement of its $3.2 billion takeover offer. The move comes in response to Forward Air's recent considerations of terminating the acquisition deal, which was initially announced on August 10. The proposed merger aimed to unite the expedited Less Than Truckload (LTL) freight businesses of both companies.

In its lawsuit, Omni Logistics is pushing for the finalization of the merger and has requested a judicial declaration affirming that it has fulfilled all the requirements stipulated in the merger agreement. The corporation is urging for a trial and ruling before the merger agreement's expiration date on February 10, 2024.

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Forward Air had announced on October 26 that it was exploring avenues to terminate the merger offer. A group of Forward Air investors filed a lawsuit to stop the acquisition, which prompted this decision. Forward Air's management contended that Omni had violated commitments outlined in the merger agreement, leading to their consideration of termination.

In response to Forward Air's position, Omni CEO J.J. Schickel emphasized the benefits of the proposed merger in a letter addressed to Forward Air stockholders. Schickel highlighted the industry's shift towards a more integrated service model, driven by supply chain disruptions and heightened customer focus on cost and efficiency in recent years.

According to Schickel, “The industry has been evolving towards a more integrated service model for customers, accelerated by the supply chain disruptions and heightened customer focus on cost and efficiencies that have marked the past few years." He underscored the strategic logic behind the transaction, asserting that combining Forward Air and Omni would create an all-in-one expedited LTL partner capable of meeting evolving customer needs. Schickel emphasized the elimination of a sizable layer of cost and complexity while maintaining service quality, with the help of a seasoned and successful commercial team.

As the legal battle unfolds, the outcome remains uncertain. Omni Logistics is committed to pursuing the merger and upholding the terms of the agreement, while Forward Air contends that Omni has breached its commitments. The case in the Delaware Court of Chancery will play a pivotal role in determining the fate of the proposed $3.2 billion takeover, with potential implications for the landscape of expedited LTL freight businesses.

In the coming months, stakeholders will closely watch the legal proceedings and the decisions that will shape the future of these two logistics giants.