DHL selling Chinese supply chain operations

S.F. Holding is paying about $796 million in what the two companies are calling a 10-year strategic partnership.    Deutsche Post DHL Group has agreed to sell its supply chain operations in China to S.F. Holding with an upfront payment of around $796 million.
   The transaction involves the supply chain business in Mainland China, Hong Kong and Macau and has no bearing on Deutsche Post DHL Group’s business activities in international express, freight transport and e-commerce logistics solutions in China.
   As part of the strategic deal, Deutsche Post DHL Group will receive an upfront payment of RMB 5.5 billion and a revenue-based partnership fee over the next 10 years. S.F. Holding will have access to Deutsche Post DHL Groups supply chain services, management expertise, transportation and warehousing technology. The co-branded organization will operate under the leadership of Yin Zou, the current CEO for Greater China for DHL Supply Chain, along with his existing management team.
   The partnership will allow Deutsche Post DHL Group to continue to participate in the fast-growing Chinese supply chain market, leveraging S.F. Holding’s extensive domestic infrastructure, distribution network and broad base of local customers. 
   “The joint capabilities of Deutsche Post DHL Group and S.F. Holding will create a unique platform to meet the need for a high-quality end-to-end supply chain provider in China,” said Frank Appel, CEO of Deutsche Post DHL Group. “S.F. Holding’s local market expertise in in China has real advantages for our customers across all industries including technology, healthcare, retail, automotive and e-commerce. 
   “Combined with our global operations standards and network support, the agreement provides a solid foundation to continue exploring further opportunities in China in the coming years,” Appel said.
   Dick Wong, chairman of S.F. Holding, said the company has been pursuing strategic partnerships to grow into a “truly integrated logistics solutions provider that delivers best-in-class services for our clients. This partnership agreement will strengthen our capability in providing supply chain services to a diverse realm of industries and allow us to bring world-class management expertise into our supply chain business operations, enabling us to further understand and tailor to our customer needs.”

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