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Guangdong Eyes GLP China Stake, Valuation at $6.9B

Guangdong Holdings explores acquiring major stake in GLP China, potentially valuing the unit at $6.9 billion.

By Alex P. Chase

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4/30, 01:45 EDT
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Key Takeaway

  • Guangdong Holdings Ltd. is considering acquiring a controlling stake in GLP China, potentially valuing the unit at $6.9 billion.
  • The state-backed firm is also exploring options for China Vanke Co.’s 21% stake in GLP, indicating a broader logistics sector strategy.
  • Discussions are preliminary with no certainty of transaction completion; GLP indirectly holds an 84.3% stake in its China operations through CLH Ltd.

Potential Acquisition by Guangdong Holdings

Chinese state-owned investment company Guangdong Holdings Ltd. is reportedly considering a bid for the China operations of logistics firm GLP Pte. Sources familiar with the matter have indicated that Guangdong Holdings, backed by the Guangdong local government, is in the process of conducting due diligence on GLP’s China assets. The focus of this exploration is on the possibility of acquiring a controlling stake in GLP China Holdings Ltd. This move could potentially value the China unit at approximately 50 billion yuan ($6.9 billion), according to one of the sources. The unit's net asset value was reported at $14 billion attributable to the majority shareholder as of the end of 2023, based on its latest financial statements.

Exploring Additional Deal Options

In addition to the potential bid for GLP China Holdings Ltd., Guangdong Holdings is also exploring options regarding China Vanke Co.’s 21% stake in GLP. The details concerning the deal's structure and pricing are still under consideration, as the due diligence process is in its preliminary stages. This indicates a broader strategy by Guangdong Holdings to possibly consolidate its position in the logistics sector by acquiring significant stakes in GLP’s operations.

Preliminary Deliberations

It is important to note that the discussions and considerations regarding this potential acquisition are still in the early stages. There is no certainty that Guangdong Holdings will proceed with the transaction. GLP indirectly holds an 84.3% stake in GLP China through a special purpose vehicle, CLH Ltd., as revealed in its 2023 annual report. The outcome of these deliberations could have significant implications for both companies involved.