HNA Group in Exclusive Talks With Singapore Logistics Firm Shareholders
16 May 2016 - 10:40AM
Dow Jones News
SINGAPORE—CWT Ltd.'s controlling shareholders have entered
exclusive talks to sell their stake to a unit of Chinese
conglomerate HNA Group Co., the Singapore-listed logistics company
said Monday.
People with knowledge of the situation estimated the deal would
value CWT at US$1 billion.
C&P Holdings Pte. Ltd. is owned by the founders of CWT, who
have a stake of more than 30% in the logistics company. Separately,
the individual founders also have additional CWT shares that they
are in talks to sell to HNA. An acquisition of a stake of 30% or
more triggers a mandatory offer for the entire company, according
to Singapore takeover rules.
The Wall Street Journal reported on May 6 that HNA was in
advanced talks with C&P Holdings to buy its stake in CWT and
that exclusivity could be announced soon.
The deal, if successful, would be the latest in a series of
acquisitions Chinese companies have been making around the globe in
sectors spanning from commodities to logistics to real estate.
Chinese buyers have spent about $107 billion on foreign
takeovers this year, according to Dealogic. HNA has been one of
China's most aggressive buyers, looking to expand its
travel-to-property empire beyond the country's borders.
In February, HNA made one of the biggest acquisitions ever by a
Chinese company abroad when it agreed to buy U.S. technology
distributor Ingram Micro Inc. for about US$6 billion. Last month,
it cut a deal to buy the owner of the Radisson hotel chain and a
reached a separate $1.5 billion agreement for Swiss air-travel
logistics company Gategroup Holding AG.
In August last year, CWT said its controlling shareholders were
considering a strategic review of the business and assets. They
tapped Credit Suisse Group and Singapore's DBS Group to run the
sale process for the company.
"There is no certainty or assurance that such negotiations
between C&P and its controlling shareholders and HNA Group will
result in any definitive agreement or transaction," CWT said in its
filing to the Singapore stock exchange Monday,
Interest in the logistics industry in Southeast Asia has been
high as many of these businesses are profitable and benefit from
growing trade links and e-commerce.
Last year, Neptune Orient Lines Ltd. sold its profitable
logistics business to Japanese firm Kintetsu World Express Inc.,
which provides air and ocean freight forwarding services, for $1.2
billion. In July, Global Logistic Properties Ltd., which is partly
owned by Singapore sovereign-wealth fund GIC Pte. Ltd., spent $4.6
billion to buy 200 warehouses in the U.S.
If successful, it would be the largest acquisition deal in
Singapore so far this year.
HNA Group, which was founded in 1993, has business interests in
sectors such as aviation, tourism and finance. It has a logistics
business under HNA Logistics Group, whose operations include
shipping and marine engineering construction, bulk commodity
trading and logistics finance.
CWT, which was founded in 1970, has a market capitalization of
close to US$900 million and provides commodity logistics, freight
logistics and warehousing services. It also has a division that
specializes in the trading of nonferrous ores and precious metals,
as well as an engineering and financial services division.
During the first quarter ended March 31, CWT reported a 14%
decline in revenue from a year earlier to 1.9 billion Singapore
dollars (US$1.4 billion) and a 19% decline in net profit to S$23.7
million. It has logistics facilities in Asia and Europe with
operations in about 90 countries. It has a global network
connecting about 200 direct ports and 1,500 inland
destinations.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
May 15, 2016 20:25 ET (00:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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