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Summary
- The Chinese courier company aims to enhance its comprehensive logistics solutions portfolio.
- SF Holdings is willing to pay HK$18.8 per share as it plans to buy a 51.8 per cent stake in the target company.
Chinese multinational delivery services and logistics company SF Holdings Company (SHE: 002352) has recently expressed its intention to buy a controlling stake in Hong Kong-based logistics company Kerry Logistics Network.
In a bid to bolster its global presence, the leading courier services company is seeking acquisition of Kerry Logistics Network Ltd in a $2.3-billion deal. For each share of Hong Kong-listed Kerry Logistics, the Chinese courier is willing to pay HK$18.8 as it plans to buy a 51.8 per cent stake in the target company. Shenzhen-listed SF Holdings is expected to raise funds from external sources to finance the acquisition.
Also read: UK Contemplates A New Bill, British Logistics Sector Looks To Avoid Chaos
SF Holdings, through this potential acquisition, will look to boost its distribution network and supply chain services beyond China. The Chinese courier would leverage upon the resources of Kerry Logistics to gain a stronger foothold across key Asian markets. In the past 52-week period, shares of the Chinese courier have more than doubled giving it a market capitalisation of more than $80 billion and helping it surpass the global courier giant, FedEx Corp.
SF Holdings seems to be on a takeover spree. Earlier, it successfully completed the acquisition of Deutsche Post DHL Group’s supply chain assets in China for $855 million in 2019.
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Growth on cards
The acquisition of Kerry Logistics will lead to an enriched client base for the Chinese courier company comprising of big fashion retailers, food & beverage distributors, consumer goods firms, electronics manufacturers, and other companies across the region. SF Holdings shall leverage upon the pot of services offered by Kerry Logistics including air freight, trucking and ocean cargo services along with cross-border logistics and customs brokerage for e-commerce giants.
Notably, Kerry Logistics has a global delivery network with a presence in nearly 60 countries. The largest cargo freighter fleet in China, coupled with the wide network of Kerry Logistics would certainly help the company in deriving growth for its stakeholders and gain a strong foothold in the Asian region.
The rise in the number of e-commerce and online transactions due to macro-economic factors have proved to be a boon for the courier companies. SF Express, courier service owned by SF Holdings, has hugely benefitted from the unprecedented surge in online transactions fuelled by companies such as JD.com Inc, and Alibaba Group Holding Ltd.
Shares of SF Holdings were up by 10 per cent to CNY 117.10 on 10 February around 4:28 PM GMT+8.
