Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Allcargo Logistics in talks to acquire stake in rival Gati
BackBack

Allcargo Logistics in talks to acquire stake in rival Gati

The board of Allcargo is likely to consider the proposed acquisition in October, the people said
  • Allcargo is in discussions to acquire Gati, that’s 6% owned by Goldman Sachs Group
  • Talks are still progressing and contours of the deal may change, one of the people saidPremium
    Talks are still progressing and contours of the deal may change, one of the people said

    Allcargo Logistics Ltd is in talks to buy a stake in smaller rival Gati Ltd, people with knowledge of the matter said, as India’s biggest cargo company attempts to boost its presence across Asia’s third-largest economy.

    Allcargo is in discussions to acquire Gati, that’s 6% owned by Goldman Sachs Group Inc., at an equity valuation of about 1,300 crore ($183 million), one of the people said, asking not to be identified as the talks are private. The purchase will trigger a mandatory offer to buy Gati’s outstanding shares, the people said. India’s logistics and warehousing industry is attracting companies from Blackstone Group Inc. to Warburg Pincus as they seek to tap into a sector that Gati forecasts will be worth $217 billion by 2020. That’s buoyed by demand from e-commerce firms such as Amazon.com Inc and Walmart Inc.’s India unit to provide last-mile connectivity into cities as well as remote hinterlands across one of the world’s largest landmass.

    “For Allcargo, which was primarily into foreign trade business, buying stake in Gati is a clear de-risking initiative as the latter is more focused on domestic business," Mathew Antony, managing partner at Mumbai-based advisory firm, Aditya Consulting. “This acquisition will help Allcargo offer total logistics solutions to e-commerce companies."

    The board of Allcargo is likely to consider the proposed acquisition in October, the people said. Gati has managed to secure approval for the sale from its Japanese partner Kintetsu Group in its flagship company, Gati-Kintetsu Express Pvt., they said. Allcargo doesn’t comment on “market speculations," an external spokesman for the company said, while Gati declined to comment.

    Talks are still progressing and contours of the deal may change, one of the people said. Under Indian rules, a purchase of 25% stake in a company triggers an open offer to buy an additional 26% from public shareholders.bloomberg


    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
    More Less
    Published: 25 Sep 2019, 10:39 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App

    Chat with MintGenie