(Yicai Global) Oct.29 -- SF Holding has agreed a CNY5.5 billion (USD792 million) deal to buy DHL's supply chain services arm in China as part of the private logistics giant's efforts to pool more resources.
SF has signed a general agreement on equity purchase with the three subsidiaries of Deutsche Post DHL, the Shenzhen-based firm said in a statement. The unit covers China's mainland, Hong Kong and Macau.
SF Hong Kong will buy all equity in DHL Supply Chain Hong Kong, which serves as the main operating entity or Bonn-based DP DHL's supply chain services in the Chinese mainland, Hong Kong and Macao, as well as 100 percent of its Beijing-based unit, which is owned by DP DHL's global-forwarding freight division, in cash, according to the agreement.
SF Hong Kong or its designated wholly-owned subsidiary will be the only shareholder of the two companies after the deal's close.
SF Holding has also struck a deal on strategic cooperation with DP DHL for cobranding related to supply chains in both China's mainland and in Hong Kong with the aim of providing better solutions for the existing and new clients.
The aim of the transaction and cooperation is to integrate highly qualified assets in supply chains and logistics and reduce the cost of exploration and learning, SF Holding said, adding that trademark licensing can help the target company to maintain its current clients and to constantly explore new leads at the same time with the help of DHL's brand and its reputation in the market.
The target company will gain steady continuous access to clients and support through the specific arrangements of the pair's cooperation and will be able to better develop its supply chain services with SF's large domestic logistics network and abundant resources of highly qualified clients.
DHL's business in China mainly uses a mix of light assets with a large number of rented assets. The cooperation between the two parties can greatly ease the impacts of rent increases and other costs on its Chinese business. SF owns a large number of assets in China mainland including land, warehouses and transport facilities.
Editor: William Clegg