The mergers and acquisitions market in the Asian logistics arena appears to get hotter by the day. In the wake of the Japan Post/Toll and Kintetsu/APL merger, CJ Korea Express has joined the bidding war to acquire Daewoo Logistics.
Daewoo Logistics is a mid-sized package delivery and shipping company, which was separated from parent maritime firm Daewoo through an employee buyout during Korea’s 1999 financial crisis. CJ Korea had tried and failed to acquire Singapore’s APL Logistics in February, through its logistics subsidiary CJ Korea Express, but lost out to Kintetsu.
Competing bidders for Daewoo Logistics are Samra Midas Group and IMM Private Equity. All have answered to letters of intent sent by CIMB Securities, Daewoo Logistics’ underwriter. Daewoo Logistics recorded US$560 million in sales and US$17.5 in operating profits last year, which are a record high, reflecting a 40 percent increase and a 490 percent increase respectively. It has networks in Japan, China, Singapore, Indonesia and Myanmar. The sale amount of Daewoo Logistics is estimated to be approximately US$277.85 million.
Through this potential acquisition, CJ Korea Express is aiming to become one of the top five global logistics companies, with US$23.15 billion in sales by 2020. It has acquired Chinese delivery firm Smart Cargo, targeting markets in the Asia-Pacific region. Whether or not it acquires any distribution companies in Europe remains to be seen.