Home Depot Inc. (HD) - Get Home Depot, Inc. (HD) Report is said to have considered in recent months buying the $9 billion transportation and logistics company, according to a Recode report, citing unnamed sources familiar with Home Depot's strategy. A Home Depot spokesman told TheStreet the company does not comment on acquisition rumors.
XPO stock shot up over 7.7% to $84.76 Friday afternoon before trading was halted. Amazon's stock was lower 0.33% and Home Depot shares dipped 0.22%.
According to the Recode report, the interest reflects Home Depot's desire to keep Amazon (AMZN) - Get Amazon.com, Inc. Report from snatching up XPO first. Home Depot reportedly believes Amazon was also weighing an offer to buy XPO, which specializes in shipping and delivering big, bulky packages.
So why buy XPO?
The Connecticut-based company calls itself a supply chain solutions firm, but when it comes to enormous shipments via Amazon, it's more than that. It's the last mile deliverer that picks up the slack when the likes of FedEx Corp. (FDX) - Get FedEx Corporation Report and United Parcel Service Inc. (UPS) - Get United Parcel Service, Inc. Class B Report refuse to do so.
At TheStreet's Financial Success Strategies conference in October, TheStreet founder Jim Cramer said XPO's CEO Bradley Jacobs is pretty much unbelievable. "What Brad Jacobs realizes is that Amazon is going to start having big ticket items, that they're gonna have to ship the 70-inch TV screen," Cramer said. "UPS and FedEx will not take this business. They will not carry the big stock for the last mile. They just won't do it."
Jacobs and XPO have "decided to take over this market," Cramer added. The company has 4,000 employees in its logistics department just trying to be sure that you get your package," Cramer noted.
XPO operates two business segments: transportation and logistics. Transportation provides freight brokerage, last mile, less-than-truckload, full truckload and global forwarding services. Logistics offers engineered and customized solutions, value-added warehousing and distribution, cold chain solution and other inventory services.
Growth in eCommerce has boosted XPO's workload, the company says. As a result of the increase in demand for online shopping packages, XPO this year hired 6,000 additional holiday workers to get through the seasonal rush. That's an enormous increase from the 1,000 additional workers XPO hired last holiday season.
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