Chinese logistics giant SF Holding has made an offer for almost 52% of the shares in Kerry Logistics. Earlier this week, the financial press in China reported that SF was eying a stake in the forwarding company, but that it would involve a minority stake of 20%.

Converted, the offer for Kerry Logistics, which has a market value of USD 5.4 billion, amounts to just over USD 2.3 billion. That is almost 20% below the current market value.

That “discount” is the result of Kerry Logistics selling its warehouses to parent company Kerry Holdings as part of the deal. The forwarder’s activities in Taiwan also go to the holding company. The book profit on those divestments will then be paid out as a dividend to the current shareholders of Kerry Logistics, according to the offer of SF Holding.

Kerry Logistics Networks will continue to be registered on the Hong Kong Stock Exchange after the agreement, but trading will be limited to a total of 15% of the share capital at 25% now.

Number 1 in Asia

After closing of the transaction, which is expected in the second half of this year, Kerry Logistics will become SF’s international arm and Asia’s largest logistics provider. According to SF Holding Chairman Dick Wong, the transaction was preceded by three years of talks and the majority stake in Kerry Logistics allows his company to better cope with the fierce competition in the global logistics industry.

The sale of the distribution centres and the majority stake has yet to be approved by the current shareholders of Kerry Logistics. Competition authorities in the world will also have to approve the takeover. Therefore, SF and Kerry Holding expect to be able to complete the deal in six months.

Project logistics

Kerry Logistics also has a project logistics division which consists of over 220 industry specialists worldwide, according to the company’s website. Through inter-connected teams, these specialists manage complex logistics projects worldwide.