Shenzhen-listed SF Holdings (SZSE:002352) has made an offer to buy 51.8% of Hong Kong-listed Kerry Logistics Network (KLN) (SEHK:636) for HK$17.5bn ($2.3bn). The deal would combine the capabilities of KLN with SF Holding’s logistics company, SF Express, to create Asia’s biggest logistics group.
KLN’s largest shareholder is currently Kerry Properties, founded by Malaysian billionaire, Robert Kuok. The company’s current Chairman is Kuok Khoon Hua, the youngest of the tycoon’s eight children, who took over as CEO of Kerry Properties in June 2019 as part of Kuok senior’s succession plan. Under the deal, Kerry Properties’ share of KLN would be reduced from 63% to 32%.
SF Express has seen rapid expansion in China, benefitting from the logistics traffic generated by online shopping platforms such as Alibaba and JD.com.
Following a merger SF Express plan to use KLN’s air freight, ocean cargo services, custom’s brokerage, and cross-border logistics services to grow the business internationally. Despite losing majority ownership Kerry Logistics’ will run the international operations of the combined group and both parties have been keen to stress that the deal represents a collaboration rather than a takeover.
Under the deal SF Holdings would pay cash for 931,209,117 shares in KLN, paying HK$18.8 per share. KLN also announced that they plan to sell some warehouses in Taiwan to Kerry Properties generating a special dividend for shareholders of HK$7.28. Shareholders accepting the offer would therefore receive HK$26.08 per share.