Business reshaped by global pandemic
Gains by logistics, e-commerce companies spark M&A interest
While the COVID-19 epidemic has hampered some industries in terms of people-to-people exchanges, some others benefited from new sources of demand, including disease prevention and control. That’s led to a rise in merger and acquisition (M&A) deals in some sectors.
Chinese online retailer JD.com, delivery company SF Group and Carlyle are bidding for South Korea-based conglomerate CJ Group’s China logistics business in a deal that could fetch more than $1 billion, people familiar with the matter said.
CJ Group has hired Morgan Stanley to run the sale of Shanghai-based CJ Rokin Logistics Supply Chain Co, which it acquired in 2015 via CJ Logistics Corp.
E-commerce boom
E-commerce in China boomed amid the coronavirus pandemic, benefiting the logistics sector. China’s economy has also seen a steady recovery from the COVID-19 shock.
First-round bidders include real estate and technology companies as well as other financial sponsors and industry peers, said the sources, declining to be identified due to confidentiality restraints.
The deal could value CJ Rokin at more than 7 billion yuan ($1.1 billion), with final bids due in January, two of the sources said.
A CJ Logistics spokesperson declined to comment, as did Morgan Stanley and Carlyle. CJ Rokin could not be reached for comment. JD.com and SF did not respond to requests for comment.
The total value of goods transported via the logistics sector rose 2 percent year-on-year to 202.5 trillion yuan in the first nine months of 2020, according to data from the China Federation of Logistics & Purchasing.
M&A deals in China’s logistics sector have jumped 53 percent year-on-year to $2.3 billion this year, according to Refinitiv data.
Established 1997, CJ Rokin specializes in cold-chain and chemical products transportation, according to its website.
Cold-chain storage and transportation became increasingly important amid the pandemic, as the promising Pfizer vaccine for example is required to be stored at temperatures of -70 C or below.
Takeover battle of rivals
Canada’s GardaWorld has raised its offer for security group G4S to 3.68 billion pounds ($4.94 billion), it said on Wednesday, stepping up a hostile bid for the British company that has repeatedly rejected its advances.
GardaWorld increased its offer for G4S, one of the world’s largest private security companies, to 235 pence per share from 190 pence.
G4S shares rose 57 percent as of November 30, since GardaWorld made its offer for G4S public on September 14.
G4S said it was evaluating the revised offer along with its financial and legal advisers, adding that shareholders were strongly advised to take no action.
The London-listed company has called GardaWorld’s earlier offer, which valued G4S at about 3 billion pounds, “highly opportunistic”.
G4S also turned down last month what it termed a “highly conditional” offer from US company Allied Universal at a price of 210 pence per share.
On Wednesday, G4S said the company was still in talks with Allied Universal and that any firm offer from the US firm would be required to be announced by December 9.
GardaWorld had extended an offer deadline twice before raising its bid on Wednesday.
It had received valid acceptances of a total of 2.8 million G4S shares, or 0.17 percent, as of November 28.
With a new deadline of December 16, GardaWorld said it had reduced the acceptance condition from 90 percent to 50 percent plus one G4S share.
G4S restructured its business following a series of setbacks. It sold most of its cash-handling business in February for 727 million pounds to US peer Brinks Co, but held on to its UK operations, which have attached pension obligations.
Employing more than 500,000 people across 90 countries and regions, G4S provides security guards for prisons and other public buildings, as well as company offices.
Remote working
Salesforce.com Inc has agreed to buy workplace messaging app Slack Technologies Inc in a $27.7 billion deal, the biggest by the cloud-computing pioneer as it bets on an extended run for remote working and sharpens its rivalry with Microsoft.
The deal enables Salesforce to provide a unified platform for businesses to connect their employees, customers and partners with each other and the apps they use, bolstering its enterprise portfolio.
For Slack, the deal comes as it struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic.
The messaging app Slack changed workplace communications by focusing on real-time messaging that could be broken into conversations with groups assembled on the fly, a nimbler platform than email.
But the messaging style that Slack helped create has become an extremely competitive space, with larger, older competitor Microsoft Corp aggressively promoting its similar Teams product with integrated video and voice calling.