Competition Commission of India on Tuesday approved the proposed acquisition of 22% stake in Future Supply Chain Solutions Ltd by Nippon Express (south Asia & Oceania) Pte Ltd. Nippon Express will acquire the said stake in Future Supply for ₹641 crore, executing its plans to tap the rapidly growing Indian logistics market.
“The proposed combination pertains to the acquisition by Nippon Express of approximately 22% of the total issued and paid up share capital of Future Supply on a fully diluted basis," according to a press release.
As part of the transaction, Singapore-based Nippon Express bought 14.6% stake of the existing share capital held by SSG Capital Management in Future Supply. Besides this, Kishore Biyani-led Future Supply will issue 37,89,350 new shares to Nippon Express at a price of ₹664 per share.
Through this primary issue, Nippon Express will hold 8.6% stake on a fully diluted basis and Future Supply will raise around ₹252 crore for funding its near-term growth plans.
Both the transactions will result in Nippon Express owning a 22% stake in Future Supply, on a post money, fully diluted basis, entitling it to hold a board seat in Future Supply. Nippon Express will also have a right of first refusal (RoFR) on future stake dilution by Future Supply.
The Singapore-based company first entered into the Indian market in 2007 and currently focuses on international freight forwarding of cargo arriving in and departing from India.
Nippon Express is a wholly owned subsidiary of Japan’s Nippon Express Co. Ltd, with operations across south Asian and Oceania regions.
Future Group-owned Future Supply is a third-party supply chain and logistics service provider that offers automated and IT-enabled warehousing, distribution and other logistics solutions.
Shares of Future Supply ended 6.15% higher at ₹501.40 on the BSE today.