Chinese logistics company declares €1.8B takeover bid

SF Holding, headquartered in Shenzhen, is set to acquire a majority stake in Hong Kong’s Kerry Logistics Network.

SF Holding has announced a partial offer to obtain 931,209,117 ordinary shares or an approximate 51.5 per cent stake of Kerry Logistics Network, via an indirect wholly-owned subsidiary of SF Holding.

This proposed transaction is reported to be at a cash price of $18.80 HKD (approx. €2.0) per share. An approximate combined value for the transaction is $17,506,731,399.60 KHD or approx. €1,863,545,647.54.

In conjunction with the partial offer, SF Holding said in a statement that Kerry Logistics Network’s warehouse assets in Hong Kong will be disposed of to a wholly-owned subsidiary of Kerry Holdings Limited to unlock its shareholder value, and for the company to operate under an asset-lighter model comparable to international industry peers.

Subject to the completion of the warehouses sale, substantially all of the proceeds from the warehouses sale will be distributed to all those shareholders of the company who are shareholders of record on the record date as a special dividend of $7.28 HKD (approx. €0.77) per share. The total amount of offer price plus special dividend to be received by a shareholder of the company for every share that the shareholder tenders and is accepted under the partial offer would be $26.08 HKD (approx. €2.78), comprising the offer price of $18.80 HKD per share and the special dividend of $7.28 HKD per share.

To facilitate the transaction, the company’s business in Taiwan, including the interest in Kerry TJ Logistics Company Limited will also be sold to a wholly-owned subsidiary of Kerry Holdings Limited in compliance with the laws and regulations in Taiwan. The proceeds from the Taiwan business sale will reportedly be retained by the company for its ongoing growth and developments.

The partial offer is subject to fulfilment of certain pre-conditions including, among others, the disposal of the Hong Kong warehouse assets, and the disposal of the Taiwan business becoming unconditional under their respective sale agreements, and upon independent shareholders’ approvals being obtained at a Special General Meeting and the relevant regulatory approvals in various jurisdictions in connection with the partial offer being obtained.

The cooperation, Kerry Logistics Network said in a statement, will bring together the core competencies of SF Holding and Kerry Logistics Network across multiple verticals to create a leading Asia-based global logistics platform to meet ever-changing demands.

Under the strategic cooperation, Kerry Logistics Network will be positioned as SF Holding’s platform for international business. SF Holding and the company will also collaborate with each other in Greater China to better align their respective businesses.

By tapping into different customer segments, SF Holding and Kerry Logistics Network will coexist as separate entities in Mainland China, Hong Kong and Macau. The company 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.

Subsequent to the completion of the proposed transaction, Kerry Logistics Network’s listed status on the Hong Kong Stock Exchange will remain unchanged. The Kerry Group of companies will still hold a significant interest in the company, which will continue to operate under the ‘Kerry’ names with a clear brand identity and be managed by its current core leadership team across all markets.

Kerry Logistics Network and its group of companies is Asia-based. The group provides integrated logistics, international freight forwarding via all transport modes along with industrial project logistics, cross-border e-commerce and final mile fulfilment and infrastructure investment.

In 2019, Kerry Logistics Network reported revenue of more than $40 million HKD (approx. €4.3 million) and claims to be the largest international logistics company listed on the Kong Kong Stock Exchange. The business has more than 43,000 employees worldwide.

SF Express, in February 2019, acquired the supply chain operations of Deutsche Post DHL in China, Hong Kong and Macau.