Japan’s second-largest delivery group SG Holdings, the parent of Sagawa Express, is reportedly looking at more M&A deals in Asia to step up its international expansion after its successful US$1.1 billion IPO today.
The Kyoto-based group raised 128 billion yen (US$1.1 billion) from the placement of shares previously held by staff, with the proceeds going to an employees’ shareholding association, according to a Reuters report. It was the largest IPO on the Tokyo Stock Exchange so far this year.
“We don’t have any major funding needs. We want to attract talent by becoming a public company,” SG President Tadashi Machida told a news conference, Reuters reported.
He told journalists that the group will take another two years reviewing synergies before deciding whether to move ahead with a merger of Sagawa Express and Hitachi Transport System (HTS). In 2016, SG bought a 29% stake in HTS while Hitachi acquired a 20% share of Sagawa under a strategic alliance.
However, the Nikkei Asian Review wrote that “the company plans to use the money raised from the stock flotation for acquisitions, and to hire more workers as part of its drive to expand in Asia”. According to a report by the Kyodo news agency, SG Holdings is aiming to expand its business in Asia following acquisitions of distribution companies in Sri Lanka and Vietnam.
In Japan, Sagawa Express, the group’s parcel delivery business, is number two with about 30% of the market behind Yamato Transport but ahead of Nippon Express and Japan Post.
In recent years SG Holdings has broadened its range of logistics services and expanded abroad. The group now has over 100 subsidiaries, mostly offering freight transportation and logistics, in 24 countries in Asia and beyond.
SG has express and parcel delivery businesses in East and South-East Asia. Most recently, in 2016, it acquired Vietnamese firm Phat Loc Express and signed partnerships with RPX in Indonesia and LBC Express in the Philippines.
The group’s overall strategy is “to become Asia’s leading comprehensive logistics group”.
