By Nick Carey and Mike Stone
CHICAGO/NEW YORK (Reuters) - Package delivery United Parcel Service Inc (N:UPS) is in talks to buy Chicago-based Coyote Logistics LLC for at least $1.8 billion, a source familiar with negotiations said on Wednesday.
According to the source, Coyote is backed by Warburg Pincus, the New York-based private equity firm, which may instead opt for an initial public offering as a way to sell its stake in the transportation logistics services provider.
The source was unauthorized to talk publicly about the deal, which was first reported by Bloomberg on Wednesday.
Representatives of Atlanta-based UPS and Warburg Pincus declined to comment, while Coyote Logistics could not immediately be reached for comment.
Coyote coordinates the movement of freight across North America for around 40,000 shippers of all sizes and a variety of industries including consumer goods, industrial goods, retail and healthcare.
The company had revenue of around $2 billion last year.
In April UPS' main rival FedEx Corp (N:FDX) announced a tentative deal to buy Dutch delivery service company TNT Express (AS:TNTE) for 4.4 billion euro ($4.9 billion).
European regulators blocked a 2013 takeover of TNT by UPS due to concerns it would stifle competition. But analysts and executives have said FedEx, with its strong air fleet, would complement TNT's sizeable European road network and not pose any threat to competition.
In June FedEx asked the European Union's competition regulator to approve its bid for TNT.