JD.com, Carlyle among bidders for CJ Group's US$1b China logistics business: sources

[HONG KONG] Chinese online retailer JD.com, delivery company SF Group and Carlyle are bidding for South Korean conglomerate CJ Group's China logistics business in a deal that could fetch over US$1 billion, people familiar with the matter said.

CJ Group has hired Morgan Stanley to run the sale of Shanghai-based CJ Rokin Logistics Supply Chain, which it acquired in 2015 via CJ Logistics Corp.

It comes as e-commerce in China has boomed during the coronavirus pandemic, benefitting the logistics sector. China's economy has also seen a steady recovery from the Covid-19 shock.

First-round bidders also include real estate and technology companies as well as other financial sponsors and industry peers, said the sources, declining to be named due to confidentiality restraints.

The deal could value CJ Rokin at over seven billion yuan (S$1.43 billion), with final bids due in January, two of the sources said.

A CJ Logistics spokesperson declined to comment, as did Morgan Stanley and Carlyle. CJ Rokin could not be reached for comment. JD.com and SF did not respond to requests for comment.

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The total value of goods transported via the logistics sector rose 2 per cent year-on-year (y-o-y) to 202.5 trillion yuan in the first nine months of 2020, according to data from China Federation of Logistics & Purchasing.

Mergers and acquisitions in China's logistics sector have jumped 53 per cent y-o-y to US$2.3 billion this year, according to Refinitiv data.

Established by brothers Zhang Yurong and Zhang Yuqing in 1997, CJ Rokin specialises in cold chain and chemical products transportation, according to its website.

Cold chain storage and transportation have become increasingly important during the Covid-19 pandemic, which has killed over one million people, as the promising Pfizer vaccine for example is required to be stored at temperatures of minus 70 degrees Celsius or below.

REUTERS