SF Holding takes over Kerry Logistics in $2.3b deal
Kerry Logistics is set to become the vehicle of SF Holding to new markets, as the two realign their businesses in China.
February 11, 2021
By PLA Editor
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Parcel delivery firm SF Holding is set to acquire a majority stake of Kerry Logistics as it aims to improve its international logistics capacity in a proposed ‘strategic investment and cooperation’ between the two companies, a press release confirmed.
The proposed takeover will see the Chinese courier take a 51.8 percent stake in Kerry Logistics at HK$18.8 (US$2.43) per share, with the deal valued at US$2.3 billion.
News broke of a potential deal last week as trading for both companies was halted in Hong Kong on Friday.
In a joint press statement on 10 February, the companies said Kerry Logistics will be positioned as SF Holding’s platform for international business, and the two will collaborate in China to ‘better align their respective businesses.’
Kerry Logistics Network opened a logistics centre in China’s Hebei province in January aiming to capture the market potential in chemical logistics. The Hong Kong-listed firm also plans to build a bonded logistics facility at Hainan’s free trade port, scheduled for completion in 2023.
“By tapping into different customer segments, SF Holding and Kerry Logistics Network will coexist as separate entities in Mainland China, Hong Kong and Macau,” Kerry Logistics said, noting that it will continue to grow its logistics businesses, both in terms of scale and coverage.
“The partnership is expected to create significant synergies to boost both companies’ growth and leadership in the logistics sector with clear business focuses and complementary strengths to bring value to investors,” the two added.
As part of the deal, Kerry Logistics will have to sell warehouse assets for HK$13.5 billion and its Taiwan business for NT$4.5 billion ($161 million) to its parent company, the statement said. SF Holding will offer cash for the proposed stake and plans to keep Kerry Logistics listed in Hong Kong.
The companies said the cooperation will bring together their core competencies across multiple verticals to create a ‘leading Asia-based global logistics platform.’
The Chinese group’s courier service SF Express has benefitted from the rise in online shopping in China fueled by e-commerce companies, and has been making moves to boost its logistics capabilities. In 2019, it completed the acquisition of Deutsche Post DHL Group’s supply chain assets in China for 5.5 billion yuan ($855 million).
SF Airlines, the group owned express carrier, has been expanding its fleet last year, heeding the call for more freight capacity by completing the conversion of a B757-200F in November and launching an air cargo route from Changsha to Osaka in the same month. It is currently the largest cargo airline in China, with a fleet of 61 aircraft serving more than 70 cities.