KUALA LUMPUR: 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.
CJ Century said the RM100 million price tag will be satisfied via the issuance of 200 million new CJ Century shares to CJ Logistics 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 its key logistics hub and networks.
CJ Korea Express Malaysia is also 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 mid-term 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 from the obligation to undertake a mandatory takeover offer.
This is because on 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 takeover offer.
Barring any unforeseen circumstances, the proposals are expected to be completed by the second quarter of 2020.
Shares in CJ Century were not traded yesterday. The counter last closed at 38 sen with a market capitalisation of RM151.78 million.