The Hong Kong-based provider is building up its international network, targeting an unnamed logistics company for its third purchase since the start of last year.
Asian logistics provider Kerry Logistics Network Ltd. is preparing to expand its global network with the acquisition of a U.S. freight forwarder, the company told analysts Monday.
The Hong Kong-based company, which specializes international freight forwarding and supply chain services in China and Southeast Asia, said in a conference call that it will acquire a 51% stake of an unnamed American company, and would announce the acquisition in less than two months, according to a report by the Jefferies Group investment firm.
Kerry has also identified acquisition targets in Singapore, the Philippines and Indonesia, the report said.
Experts expect more logistics mergers to come as executives say they are under pressure to provide more consolidated services to their customers. A survey by Penske Logistics last fall of 30 companies in North America, Asia and Europe found that logistics companies see a demand for more “one-stop-shop” logistics services, and that many were considering acquisitions following two years of unusually heavy merger activity.The expansion of Kerry’s global network will better position the company to serve clients as it expands its international e-commerce capabilities for retailers. The comes as the rapid growth of online sales has third- party logistics companies scrambling to fill new logistics needs for retailers, and Kerry has been focused on building its cross-border services in Asia.
Kerry’s U.S. acquisition target “has a good growth profile and is expected to contribute to international freight forwarding earnings in 2016,” the Jefferies report said.
The acquisition would follow international acquisitions by the company in the Middle East and Canada in early 2015, “an instrumental part of our long-term [international freight forwarding] strategy to build a global network across six continents,” said William Ma, the company’s managing director, in a statement at the time.
Earlier, in 2013, Kerry also acquired a majority stake in Braservice, a leading Brazil-based logistics and customs brokerage firm, enabling the company to tap into growing trade between Asia and Latin America, executives said at the time.