SF Holding, a Shenzhen-based package delivery services provider, has announced its acquisition of a 51.8% stake in Hong Kong-listed Kerry Logistics Network (KLN) for HK$17.6 billion (US$2.3 billion).
Linklaters advised KLN, while Slaughter and May acted as counsel for SF Holding.
“This is really a transformational partnership,” Christopher Yip, a partner at Linklaters, told China Business Law Journal. “We believe this will transform the global logistics market, combining two leading players and allowing them to leverage their respective strengths.
“There were many different components to this transaction, all of which had to be pieced together.”
Yip said the deal structure was complicated. “Partial offers are still relatively rare, and there were respective commercial requirements from SF Express and the Kerry Group to hold minimum shareholdings, which made the structuring of the transaction quite difficult,” he said.
As part of the deal, KLN’s warehouses in Hong Kong will be disposed of to a wholly owned subsidiary of its parent company, in order for it to operate under an asset-light model.
Yip said another challenging aspect of the deal was the public float of the company falling to 15%, below the mandatory 25% threshold, which required a regulatory waiver.
“The various special deals, and the fact that KLN holds significant interests in listed subsidiaries in Thailand and Taiwan, made balancing multiple competing commercial drivers all the more challenging,” he said.
After the all-cash deal is approved, the company will remain listed on the Hong Kong Stock Exchange, and Kerry Holdings’ share in the company will reduce to about 32% from 63.35%, as reported. Shareholders of Kerry Logistics will also receive a special dividend of HK$7.28 per share as part of the offer.