Share trading has been suspended in Kerry Logistics Network on the Hong Kong Stock Exchange amid rumours that the company is about to be bought by the Chinese Express company SF Holdings, owner of SF Express.
A variety of different news sources are reporting a that the owner of Kerry Group, the 97-year-old Robert Kuok, is in discussions with SF Express but the nature of these discussions is unclear. The news agency Reuters is asserting that the ambition is “to take Hong Kong-listed Kerry Logistics Networks Ltd private”. Other reports say that the aim of the discussions is for SF to buy 20% of the equity of Kerry Logistics Network.
Robert Kuok is a Chinese-Malay businessman who started Kerry Logistics, which is now traded on the Hong Kong Stock Exchange as Kerry Logistics Network. His ownership vehicle is Kerry Group which also owns a large warehousing company. Mr Kuok also owns substantial hotel businesses.
Kerry Logistics Network has built-up a significant presence in mainland China including Kerry EAS Logistics, which is a joint venture providing forwarding and contract logistics services across much of the country. Kerry has a record of providing logistics solutions for major Western corporations in China.
However, the driver of the deal is likely to be the ambition of SF Holdings. It is now one of the largest logistics companies in China having prospered through the growth of e-retail over the past ten years. Its value on the Shenzhen stock exchange would make the business comparable to any of the largest logistics service providers in the world.
For several years, SF Express has stated that one of its ambitions is to build a global freight forwarding capability, both in order to serve its Chinese clients, who include the major Chinese e-retailers Alibaba and JD.com, but also to access business for non-Chinese shippers. Bearing in mind its size it is perhaps surprising it has not been more active in expanding outside China.
Although some form of relationship with Kerry Logistics Network might provide a degree of global presence for SF Express, it is across South East Asia that Kerry could offer more profound capabilities.
Source: Transport Intelligence, February 9, 2021
Author: Thomas Cullen