Updated from 10:10 a.m. EDT

EGL Eagle Global Logistics ( EAGL) announced Monday that it was acquiring Circle International Group ( CRCL), a rival freight-shipping company, in an all-stock deal valued at $543 million that would increase its international presence.

Each of Circle's approximately 17.65 million shares will be converted to one share of EGL, valuing Circle at $30.75 a share based on Friday's closing stock prices. That represented a 22% premium over Circle's closing price Friday.

Circle International closed up 2 5/16, or 9.2%, at 27 7/16. EGL Eagle finished down 17/32, or 8.23%, at 28 7/32.

The combined company is aiming for an annual growth in the mid-20% range for its earnings per share, EGL said.

San Francisco-based Circle operates more than 300 logistical centers for international air and ocean transportation in more than 100 countries, while EGL operates 92 terminals in nine countries, 79 of which are in North America.

"This merger would enhance EGL's already solid market position domestically and would present tremendous opportunities for international growth," James R. Crane, EGL's chief executive, said in a statement. Crane will continue as chief executive of the combination, and Peter Gibert, Circle's chief executive, will join EGL's board and will fill another role that is not fully defined at this point, according to Michael Slaughter, a spokesman for EGL.

Slaughter said Circle's operating strengths would enhance EGL's marketing focus.

He said EGL and Circle will not face significant overlaps in their facilities or employees, but "integration is definitely a challenge in any situation." The companies will focus on combining their information technology systems and will have to meet the needs of both of their sets of customers, Slaughter added.

Gregory Burns, an analyst for Lazard Freres who has an outperform rating on EGL, called the acquisition a "very good long-term move" that would create a "strong international franchise" for EGL. Investors may initially adopt a wait-and-see attitude to observe the integration, Burns said, but he thinks "the company will be extremely well-positioned" in the medium-to-long run.

Since the merger combines nonasset-based businesses (which are businesses that provide management expertise but not tangible assets for moving the freight), EGL will gain employees, expertise and revenue -- and the challenge of maintaining quality employees and integrating the companies' information technology, Burns said.

Following the merger, EGL will have the ability to clear U.S. Customs, tender freight on ocean liners and air carriers internationally, as well as continue to move domestic airfreight. "It's extending an industry trend toward one-stop shopping," Burns said.

Lazard Freres has done no underwriting for EGL.

EGL, based in Houston, said the combined company is expected to have a stock market capitalization of about $1.5 billion.

EGL also announced Monday that it would change its fiscal year-end from Sept. 30 to Dec. 31, to deal with the reporting requirements of the combination and comparisons with similar companies.

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