PETALING JAYA: CJ Century Logistics Holdings Bhd (CJ Century) is acquiring a 100% stake in logistics services provider CJ Korea Express Malaysia Sdn Bhd (CJKX) from CJ Logistics Asia Pte Ltd (CJ Asia) for RM100 million, in order to expand its existing logistics business.
However, as the purchase sum will be satisfied via the issuance of 200 million new ordinary shares in CJ Century to CJ Asia at an issue price of 50 sen per share, the shareholdings of CJ Asia in CJ Century will increase from about 30.89% to 54.31%, thereby triggering the criteria to launch a mandatory offer.
As such, CJ Asia will seek an exemption from the Securities Commission from the obligation to undertake a mandatory takeover offer to acquire the remaining CJ Century shares it does not already own.
In explaining its rationale, CJ Century said the proposed acquisition will allow it to further strengthen its total logistics offerings as well as expansion via the sharing of key logistics hub and networks.
“By streamlining the logistics business of CJ Korea Group under CJ Century, the company envisions to improve operational efficiency and enhance operational synergies between the CJ Century Group and the CJ Korea Group.
“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,” it said.
The proposed acquisition is expected to contribute positively to the future revenue and earnings of the enlarged CJ Century Group.
The proposals are expected to be completed by the second quarter this year.
