SF Holding buys DHL’s China supply chain unit to diversify its business from parcel delivery
- SF will pay DHL an upfront payment of 5.5 billion yuan, with a revenue-based fee over 10 years
- The deal doesn’t affect DHL’s existing business in global express, freight transport and e-commerce logistics
Deutsche Post DHL Group, the world’s largest postal and courier company, has sold its China supply chain business to the company that owns the biggest express delivery service on the mainland to create a 10-year venture.
As part of this venture, SF will have access to DHL’s supply chain services, management expertise, transport and warehousing technology, the statement said. The venture has no bearing on DHL’s business in global express, freight transport and e-commerce logistics solutions in China, the statement said.
DHL will receive an upfront payment of 5.5 billion yuan (US$792 million) and a revenue-based fee over the next 10 years. DHL’s head of supply chain Yin Zou will lead the joint operation along with his existing team.
The venture “will create a unique platform to meet the need for a high quality end-to-end supply chain provider in China,” said Frank Appel, the chief executive of Deutsche Post DHL Group.
For SF, the venture gives it a leg up the value chain to better serve its customers, helping the company “grow further internationally” and “provide supply chain services to a diverse realm of industries,” SF’s chairman Wang Wei said in a statement. The additional service would help SF diversify into a new income source, where its core express delivery business is coming under intense competition.