Chinese e-commerce giant, JD.com, Inc., has announced that JD Logistics, Inc. (JD Logistics) — its logistics subsidiary — is set to acquire a majority stake in Chinese domestic courier firm, Deppon Logistics Co., Ltd, in for 9 billion yuan (US$1.42 billion) deal.
JD.com said in a statement that JD Logistics has entered into a "series of agreements" in relation to the proposed acquisition of Deppon.
Deppon is an integrated, customer-centered logistics company providing a wide range of solutions including Less-Than-Truckload (LTL) transportation, Full Truck Load (FTL) transportation, delivery services, and warehousing management in China.
Acquisition of majority stake
"Pursuant to the transaction agreements, JD Logistics will acquire approximately 99.99% of the equity interest in Ningbo Meishan Baoshui Area Deppon Investment Holding Company Limited (the Deppon Holdco), which in turn holds a total of approximately 66.50% of the issued share capital of Deppon, for a total consideration of approximately RMB9.0 billion," JD.com said in its announcement.
The transactions are subject to a staggered acquisition arrangement and certain customary closing conditions, including relevant regulatory approvals, it added.
JD said upon completion of the proposed transactions, Deppon Holdco (including Deppon and its subsidiaries) will become a subsidiary of JD Logistics, and its financial results will be consolidated into JD Logistics’ consolidated financial statements.
As Deppon is listed on the Shanghai Stock Exchange, subject to the satisfaction of the conditions set out in the agreements and the completion of the proposed transactions, JD Logistics will make a mandatory general offer for all the issued, unrestricted and tradable shares of Deppon (excluding the issued and unrestricted shares of Deppon held by the Deppon Holdco) at a price of RMB13.15 per share.
JD Logistics' planned acquisition of Deppon is expected to further boost its e-commerce offering to support the surge of the segment amid continued lockdown measures in many cities in China.
As of the end of 2021, JD Logistics operates more than 1,300 warehouses and had over 7,200 delivery stations.
