China FedEx rival eyes investment in US$5b Kerry Logistics

Shanghai

SF Holding, 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 a minority stake in Kerry Logistics Network, said the people, who asked not to be identified because the information is private.

Kerry Logistics shares have risen 38 per cent in Hong Kong trading this year, giving the company a market value of about US$5.4 billion.

Kerry Logistics is also considering selling some assets to its parent company, the sources said.

Mr 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.

Details of a potential transaction are still being discussed, and the structure of the deal could change, they said.

Trading in Kerry Properties and Kerry Logistics was halted in Hong Kong on Friday, pending inside information announcement. SF Holding also suspended its trading in Shenzhen, pending an announcement.

Shares of SF Holding have nearly tripled over the past 12 months, helping the company surpass FedEx in value and giving it a market capitalisation of about US$75 billion.

The group owns courier service SF Express, which has benefitted from the rise in online shopping in China fuelled by companies like Alibaba Group and JD.com.

In 2019, SF Holding completed the acquisition of Deutsche Post DHL Group's supply chain assets in China for 5.5 billion yuan (S$1.14 billion).

There is no certainty the deliberations will lead to a transaction, sources said. Representatives for SF Holding, Kerry Group, Kerry Logistics and Kerry Properties did not immediately respond to requests for comment.

Kerry Logistics provides warehousing, distribution and supply chain solutions to companies across Asia.

Its offerings include air freight, trucking and ocean cargo services, as well as customs brokerage and cross-border logistics for e-commerce companies.

Clients of Kerry Logistics include fashion brands, food and beverage distributors, consumer goods companies, electronics manufacturers and other companies throughout the region.

The company also offers package delivery services in seven Asian markets under the Kerry Express brand, its website said. BLOOMBERG