SF Holding to buy KLN stake
SET-listed Kerry Express Thailand (KEX) says Chinese logistics giant SF Holding's intention to buy a 51.8% stake in Hong Kong-listed Kerry Logistics Network (KLN), the parent firm of KEX's major shareholder KLN Logistics Thailand, shows SF is gearing up to expand its footprint in Asia.
Kerry Express notified the Stock Exchange of Thailand of SF Holding's move yesterday.
Kerry Express Thailand chief executive Alex Ng said the acquisition has yet to take place.
"However, this may reflect SF Holding's strong determination to expand its overseas market reach, particularly in Asia," Mr Ng said.
SF Holding is the biggest logistics delivery provider in China with a market cap of 2 trillion baht.
Sutthikead Chantarachairoj, chief executive of Shippop, a local logistics aggregator, said SF Holding has a strong foothold in the Chinese market and this deal could be a boon for both SF and Kerry as the two could leverage the infrastructures of the other, strengthening international delivery capacity with cost efficiency and effective route management.
SF may look to expand to Hong Kong, where Kerry has multiple logistics businesses, such as seaport and delivery services, he said.
SF, which also has a foothold in Thailand, could grow faster here by capitalising on Kerry's network, Mr Sutthikead said.
Kerry Express Thailand's statement letter to the SET said SF intends to make "a conditional partial cash offer to acquire approximately 51.8% of total issued and paid-up shares of KLN".
KLN is a shareholder of KLN Logistics Thailand, which holds a 52.1% stake of KEX.
Kerry Express said the deal is subject to certain conditions.
KEX launched an initial public offering on the SET in December last year.
According to a Bualuang Securities stock analysis, SF Holding is a major logistics service operator in China, capturing the high-quality delivery service segment.
SF's investment would give it indirect control of a 27% stake in KEX.
With the rise of the e-commerce industry and flourishing shipments between Thailand and China, parcel volume could increase for Kerry Express, said the brokerage.
The investment would also lead to knowledge and technology-sharing between SF and Kerry, bolstering delivery efficiency and reducing cost in the future, said the analysis.
Kerry Express Thailand booked 14.7 billion in sales and service revenue, and 1 billion baht in profit in the first nine months of 2020.