FedEx has announced that its board of directors has approved the spinoff of its freight business, clearing the way for FedEx Freight to separate from its parent company as planned on June 1.

The spinoff plan was first announced in late 2024 and is expected to allow FedEx to focus more intently on its core package delivery and logistics network, while enabling the freight unit to pursue its own growth strategy.

FedEx Freight, which focuses on less-than-truckload (LTL) shipping, has stated it plans to streamline its network and fleet, modernize technology, and accelerate profitable growth as an independent company.

The unit has previously forecast a compound annual growth rate for mid-term revenue between 4% and 6%, with adjusted operating profit growth projected between 10% and 12%.

Under the terms of the spinoff, FedEx shareholders will receive one share of FedEx Freight for every two shares of FedEx common stock they hold.

FedEx stated it will retain a 19.9% stake in FedEx Freight and plans to dispose of these shares within 24 months through a debt exchange, shareholder distribution, or stock swap.

Prior to the spinoff, FedEx Freight will also pay FedEx a cash dividend of approximately $4.1 billion, funded by proceeds from previously issued notes and borrowings under a term loan facility.

FedEx Freight shares are expected to begin trading on the New York Stock Exchange on June 1 under the ticker symbol FDXF.