Shipping and transport company Nippon Yusen Kabushiki Kaisha (NYK) is to acquire the remaining 41% stake of its freight forwarding subsidiary, Yusen Logistics, from minority shareholders. The transaction is expected to be completed by late March, 2018.
Following a board of directors meeting, Yusen Logistics expressed an opinion in support of the tender offer and recommended that the shareholders of the company tender their shares in the tender offer. NYK already holds 59.61% of the common stock of Yusen Logistics, with the outstanding shares listed on the First Section of the Tokyo Stock Exchange Inc. (TSE).
The full acquisition comes as the acquirer has been promoting the policy of “differentiating our business by offering value-added shipping services” and has worked to diversify its operations.
In the container shipping industry, freight rates have been experiencing sharp fluctuations; especially in recent years, as a result of the increase in shipping capacity due to the deliveries of newly-built ships and substantial fluctuation in the supply-demand balance, the market has continuously been sluggish and it has been difficult to ensure stable earnings.
Yusen Logistics states, “Amidst such a harsh operating environment, the Tender Offeror has been, in accordance with the basic policy in the medium-term management plan, i.e., “More than Shipping 2018 – Stage 2: Leveraged by Creative Solutions” (fiscal year 2014 – fiscal year 2018) (Note) launched in April 2014, engaged in strengthening competitiveness through differentiation from other companies as well as strengthening resilience to the unstable shipping market.”
As such, “the Tender Offeror has been focused on lowering the core asset ratio in containerships and dry bulk carriers and increasing the ratio of the light-asset business, such as forwarding, and the stable freight rate business, such as logistics, car transport vessels and offshore business, and has been striving to develop a business portfolio that generates profits under any market condition.”
Source: Yusen Logistics
