China’s HNA Group mulls buying Singapore-based logistics company CWT

07 May 2016


HNA Group Co, which last month agreed to buy US hotel chain Carlson Rezidor Hotel Group, is preparing to spend more than $945 million to buy Singapore-based logistics company CWT Ltd, Bloomberg today reported, citing people with knowledge of the matter.

The Loi family that controls CWT could enter exclusive talks with HNA as soon as next week, the report said.

In August last year, CWT said that its controlling shareholder, C&P Holdings Pte Ltd, which holds a 32-per cent stake, was conducting a strategic review of its business and assets, which could lead to selling its stake in CWT.

C&P Holdings hired Credit Suisse Group AG and Singapore's DBS Group Holdings Ltd to conduct a strategic review.

C&P Holdings Pte Ltd is run by chairman Loi Kai Meng who in 2004 acquired a controlling stake in CWT. Loi and his family own close to 65 per cent of Singapore Stock Exchange-listed CWT.

CWT currently has a market value of $945 million, but analysts opine that a sale may fetch more than $1.2 billion.

An acquisition of 30 per cent or more stakes would automatically trigger a mandatory offer for the entire company, according to Singapore takeover rules.

Founded in 1970, CWT is Singapore's largest homegrown logistics provider, employing around 6,000 people and generating sales of S$9.9 billion in 2015.

It provides commodity logistics, freight logistics, warehousing services, and defence procurement. It also has a division that specialises in the trading of non-ferrous ores and precious metals.

A Fortune 500 company, HNA has grown from a local aviation transportation operator into a multinational conglomerate encompassing aviation, airport management, financial services, real estate, retail, tourism, and logistics.

The group has assets worth over $90 billion, and has 11 listed companies. In 2015, HNA had revenues of $29 billion and employed nearly 180,000 worldwide.

It has a fleet of over 820 aircrafts, serves nearly 700 domestic and international routes, flies to over 200 cities, and has serves 77.4 million passengers annually.

HNA operates and manages Hainan Airlines, Tianjin Airlines, Deer Jet, Lucky Air, Capital Airlines, West Air, Fuzhou Airlines, Urumqi Air, Beibu Gulf Airlines, Yangtze River Airlines, Guilin Airlines, My CARGO, Africa World Airlines, and Aigle Azur.

It has recently been on an acquisition spree; in April it offered to buy Swiss catering and hospitality company Gategroup for $1.5 billion. Earlier in February it struck a deal in February to buy US electronics distributor Ingram Micro Inc for about $6 billion (See: China's HNA Group to buy US electronics distributor Ingram Micro for $6 bn), and paid $2.73 billion to buy airport luggage handler Swissport International Ltd.

It also is the biggest shareholder in Spanish hotel company NH Hotel Group SA.

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