CJ Century acquires related company for RM100m to expand logistics business
12 Feb 2020
CJ Century Logistics Holdings Bhd is acquiring CJ Korea Express Malaysia Sdn Bhd for RM100 million to expand its logistics business.
The seller is CJ Century’s Singapore-based substantial shareholder, CJ Logistics Asia Pte Ltd, the group said in a filing with Bursa Malaysia.
The deal is therefore deemed a related party transaction.
CJ Century said the RM100 million price tag will be satisfied via the issuance of 200 million new CJ Century shares to CJ Asia at 50 sen per share.
The group said the acquisition will allow it to further strengthen its total logistics offerings as well as expand key logistics hub and networks.
CJ Korea Express Malaysia is similarly involved in total logistics services, including freight forwarding, warehousing and distribution, as well as transportation.
“With the combined strength and the backing of the ‘CJ’ name, this opens up new opportunities to CJ Century, particularly in the course of tendering and servicing multi-national contracts,” CJ Century said.
“Upon the completion of the proposed acquisition, the immediate goal is to integrate the support services of both companies, which will be capable of managing the combined strength of approximately 1,500 staff across Malaysia.
“Following that, the midterm integration goal can be realised with the combination of operational resources, thereby providing seamless solutions to customers,” it added.
Following the shares issuance, CJ Century intends to seek an exemption from the Securities Commission Malaysia (SC) from the obligation to undertake a mandatory take-over offer.
This is because upon completion of the proposed acquisition, CJ Logistics Asia will increase its shareholdings in CJ Century from 30.89% to 54.31%, hence exceeding the 33% threshold that would trigger a mandatory take-over offer.
Barring any unforeseen circumstances, the proposals are expected to be completed by the second quarter of 2020.
Shares of CJ Century were not traded today. The counter last closed at 38 sen with a market capitalisation of RM151.78 million.
Source: The Edge Markets