DHL, one of the world’s largest express services providers, has signed an agreement with Sinotrans Air Transportation Development Co., Ltd. to purchase the remaining 50 per cent share of the Sinotrans-Exel JV in China, which was formed in 1996.
The new wholly owned foreign entity (WOFE) will facilitate the continued integration of the heritage Exel and DHL business units under the DHL Logistics brand in China, which DHL said will create greater business synergies and enhanced customer benefits while at the same time drive economies of scale.
"DHL and Sinotrans have had, and continue to have, an ongoing and mutually beneficial relationship in the logistics and express industry in China,"emphasized DHL Global Forwarding’s AsiaPacific CEO, Mr. Peter Landsiedel.
"Sinotrans’ agreement to sell its 50 percent stake in the Sinotrans-Exel JV is strategically relevant to each organization, and is a move that suits both groups’ long-term objectives and approach towards developing and maintaining a market leadership position inChina’s booming logistics industry."
Exel-Sinotrans Freight Forwarding is a 50-50 joint venture between China National Foreign Trade Transportation (Group) Corporation, parent of the listed company, and Exel, which was bought by Deutsche Post World Net, parent of DHL in 2005. The venture, which deals in international freight forwarding operations of ocean-shipped and air-transported cargo, had RMB 74.1429 million net profits in 2006.
The listed company sold its 50% stake in the venture at the China Beijing Equity Exchange with a reserve price atRMB 628.5 million.DHL, which holds most of the customers of the venture, eventually signed for the equity.
DHL, which has three main operations in China – express, transport logistics and supply chain management – has indicated its intention to speed up investment in China and earlier in November said it was boosting investment in its North-Asian hub in Shanghai by US$175 million. This brought its total recent investment in the region to just over US$2.2 billion.
