XPO Logistics, Inc. and Con-way Inc. announced yesterday that they have entered into a definitive agreement for XPO Logistics to acquire Con-way.

The transaction will make XPO the second largest less-than-truckload (LTL) provider in North America, and will expand the company’s global contract logistics platform.

All of the acquired operations—Con-way Freight, Menlo Logistics, Con-way Truckload, and Con-way Multimodal—will be rebranded as XPO Logistics.

Under the terms of the agreement, XPO will launch a tender offer for all of Con-way’s outstanding shares at a cash price of $47.60 per share. Following the tender offer, if successful, Con-way will merge with a subsidiary of XPO, becoming a wholly owned subsidiary of XPO. The total transaction value is approximately $3.0 billion, including $290 million of debt.

XPO has received committed financing from Morgan Stanley in the aggregate amount of $2.0 billion. The company has approximately $1.2 billion in cash. The transaction is expected to close next month.

Bradley Jacobs, chairman and chief executive of XPO Logistics, will retain these positions and lead the combined company. Douglas Stotlar, Con-way’s president and chief executive officer, will serve in a limited role as an independent advisor to the combined company through the first quarter of 2016.

“LTL is a non-commoditized, high-value-add business that’s used by nearly all of our customers,” said Jacobs. “Con-way is a premier platform that we will run with a fresh set of eyes as part of our broader offering. Importantly, we’ll gain strategic ownership of assets that will benefit our company and our customers during periods of tight capacity.”

Jacobs explained that the acquisition furthers XPO’s growth strategy. “XPO will offer best-in-class LTL services to its 16,000 customers in North America as the second largest LTL provider, with world-class capabilities for reliable, time-definite service,” he said. “Nearly all of XPO’s current brokerage customers require LTL transportation, and the majority of Con-way’s 36,000 customers can utilize multiple XPO services.”

The combination will strengthen XPO’s position in the ecommerce sector, according to Jacobs, which is projected to grow at a pace of 18 percent to 21 percent annually. XPO and Con-way both have e-fulfillment contract logistics platforms in North America and Europe.

“Another crown jewel in this transaction is Con-way’s subsidiary, Menlo Logistics,” Jacobs added, “an asset-light top 30 global contract logistics provider with additional lines of business in freight brokerage and managed transportation. Menlo serves blue chip contract logistics customers in verticals such as high tech, healthcare and retail, which complement the verticals we serve at XPO.”

The combination will grow XPO’s global ground transportation network to approximately 19,000 owned tractors and 46,000 owned trailers, 10,000 trucks contracted through independent owner operators, and access to more than 50,000 independent carriers. In North America, XPO will have approximately 11,000 owned tractors and 33,000 owned trailers, 6,000 trucks contracted through independent owner operators, and access to more than 38,000 independent carriers.

The company will have combined scale of approximately 84,000 employees at 1,469 locations in 32 countries.