Singapore Post has sold part of its stake in Malaysian express carrier GDEX to Japan’s Yamato raising S$78.4 million (€50 million) to reinvest in its e-commerce logistics expansion drive.
SingPost announced today the sale of 137.4 million shares in GD Express for RM239.1 million (approximately S$78.4 million) to Yamato Asia, achieving a net gain of approximately S$64 million from the disposal. The company, which had held 23.5% in GDEX, now holds an 11.2% strategic stake and retains its board seat.
The sale, leaving Yamato with approximately 22.8% in GDEX, comes just weeks after Yamato bought a 10% stake in the Malaysian company and said it planned to increase this to 23% in future.
Explaining the reasons for the strategic disposal, SingPost said the reduction in the stake will free up capital to allow the group to strengthen its financial capability while maintaining flexibility for future growth.
The sale proceeds will reinforce its eCommerce logistics solutions and networks in the US, Europe, China and the rest of Asia Pacific, in line with the strategy to continue strengthening integrated end-to-end eCommerce logistics solutions, including include front-end web management, warehousing and fulfilment, last mile delivery and international freight forwarding.
At the same time, as SingPost has interlinked systems with GDEX, it said it will continue to reap business synergies through its GDEX business collaboration with an added uplift that strategic partner, Yamato brings to GDEX.
SingPost Deputy Group Chief Executive Officer (Corporate Services) and Group Chief Financial Officer, Mervyn Lim, said: “This partial divestment boosts the financial capability of SingPost as the group gears up on an accelerated path to becoming a global leader in end-to-end eCommerce logistics. This deal gave us a good return on our investment and also boosted our available resources to drive SingPost's eCommerce logistics growth as it pivots into the US with the recent investments in TradeGlobal and Jagged Peak.”
He added: “Collaborations and partnerships are vital to SingPost as we connect the dots in building a global eCommerce logistics ecosystem. We continue to work with strategic partners in Malaysia and the rest of Southeast Asia while leveraging the Quantium Solutions commercial network, as well as those of our associated companies to reinforce the ecosystem we are building.”
For its part, Yamato said in January that it was investing in GDEX to build up a strategic partnership under plans for an ASEAN delivery network. The main purpose, however, was to expand its parcel delivery business in Malaysia.
GDEX had revenues of RM 197 million in the year ending June 2015, up from RM 159 million the previous year, and improved its pre-tax profit to RM 31 million from RM 24 million in 2013/14. About 80% of the revenues are generated from B2B express deliveries while B2C has grown to 20% in recent years.
