Singapore-listed Global Logistic Properties (GLP) has agreed to form a strategic partnership with China’s largest state-owned warehouse logistics provider China Materials Storage and Transportation Development Company (CMSTD) by investing US$324 million for a 15.3% stake of CMSTD, according to an official announcement.
GLP plans to acquire CMSTD’s shares at RMB11.82 per share in cash, representing a 10% discount to the last transacted price of CMSTD shares on the Shanghai Stock Exchange on July 25, 2014.
The two parties will also form a joint venture with over US$583 million in capital to develop an initial pipeline of up to 1.3 million square meters of buildable area for logistics facilities across China on 2.7 million square meters of land that CMSTD currently holds in its land reserve.
Under the agreement, GLP will hold a 49% equity stake in the joint venture, with the remaining 51% to be held by CMSTD. GLP has the option to increase its ownership in the joint venture to 50%.
“We are excited by the accelerating growth momentum in our China business," says Jeffrey H. Schwartz, co-founder and chairman of GLP. "With the support and facilitation of the Chinese investor consortium, we are pleased to establish this strategic partnership with CMSTD, which will greatly strengthen our market-leadership position and boost our development pace across China.”
Schwartz is referring to the Chinese investor consortium including China Life Insurance Co. Ltd., Bank of China Group Investment Ltd. and Chinese private equity firm Hopu Investment Management Co., which in February agreed to invest US$2.5 billion in GLP.
In another move, GLP launched a US$1.5 billion China logistics infrastructure fund to develop modern logistics facilities in China last November.
GLP is a logistics facilities provider in China, Japan and Brazil. It has property portfolio of 27 million square meters located across 76 cities, serving almost 800 customers.