SF Holding Co, one of the largest Chinese package-delivery services, is exploring a potential investment in tycoon Robert Kuok’s listed logistics business, people with knowledge of the matter said.
The Chinese courier is in talks to acquire roughly a 20% stake in Kerry Logistics Network Ltd, according to the people, who asked not to be identified because the information is private. Kerry Logistics shares have risen 38% in Hong Kong trading this year, giving the company a market value of about $5.4bn.
Kerry Logistics is also considering selling several assets, including some warehouses, back to its parent company, the people said. Kuok, who is Malaysia’s richest person, controls the firm through his family holding company Kerry Group and its publicly-traded real estate arm Kerry Properties Ltd
SF Holding is planning to buy a partial stake in a company to improve its capacity to offer logistics solutions, it said in an exchange filing on Friday, without naming any target. Its Shenzhen-traded shares will remain suspended for as many as five trading days.
Trading in Kerry Properties and Kerry Logistics was halted in Hong Kong yesterday, pending inside information announcement. Details of a potential transaction are still being discussed, and the structure of the deal could change, the people said.
An investment in Kerry Logistics would be “highly complementary” to SF Holding’s existing business strengths in express delivery and freight, said James Teo, an analyst at Bloomberg Intelligence.
“SF could use Kerry’s extensive network of modern logistics facilities in China, spanning 22mn square feet, to bolster its growing domestic supply chain business,” Teo wrote in a research note yesterday. “Kerry’s more international footprint may also aid SF’s future expansion as trade wars shift manufacturing from China to Southeast Asia, where Kerry also has a strong presence.” Shares of SF Holding have nearly tripled over the past 12 months, helping the company surpass FedEx Corp in value and giving it a market capitalisation of about $75bn.
The group owns courier service SF Express, which has benefited from the rise in online shopping in China fuelled by companies like Alibaba Group Holding Ltd and JD.com Inc. In 2019, SF Holding completed the acquisition of Deutsche Post DHL Group’s supply chain assets in China for 5.5bn yuan ($850mn).
Employees handle packages at an SF Express store in Hong Kong. SF Holding, one of the largest Chinese package-delivery services, is exploring a potential investment in Robert Kuok’s listed logistics business, people with knowledge of the matter said.
