2GO deal cost SMIC $124.5M
SM Investments Corp. has paid $124.5 million to acquire a 30.47-percent stake in leading logistics provider 2GO Group Inc. through its privately-held parent firm Negros Navigation Co. Inc.
In a disclosure to the Philippine Stock Exchange, SMIC said it had acquired a 34.5-percent stake in Negros Navigation.
As Negros Navigation owns 88.31 percent of 2GO, SMIC’s effective ownership in the logistics firm is 30.47 percent of the listed logistics provider.
SMIC said the shares were bought from China-Asean Marine B.V. for $124.5 million. The deal was priced at a “fair market value,” the disclosure added.
The rationale for the transaction was “to invest in a fast growing, dynamic logistics business,” SMIC said.
2GO is the country’s largest integrated supply chain operator whose businesses include shipping, freight forwarding, warehousing and express delivery services.
The logistics firm is now valued by the stock market at about P34 billion. Shares have spiked since SM announced the deal.
SMIC is expected to team up with the group of businessman Dennis Uy to form the controlling shareholder bloc in 2GO amid a shareholder squabble that has been referred to arbitration.
Through holding firm Udenna Investments, Uy earlier acquired a 21-percent stake in 2GO by buying the stake held by Dutch firm KGL Investment B.V. (KGL-BV) which has a beneficial ownership of about 60 percent of KGLI-NM Holdings Inc. which, in turn, controls Negros Navigation.
2GO has three core business units, namely: 2GO Freight, which handles commercial and personal shipping needs; 2GO Travel, which integrates passenger ships and fast ferries through land and sea multimodal transport linkages, and 2GO Supply Chain, which handles logistics, distribution, warehousing and inventory management.
As of end-2015, 2GO and its subsidiaries had a total fleet of 23 operating vessels, of which 19 are company-owned ships. It has four direct subsidiaries, namely, 2GO Express Inc., The Supercat Fast Ferry Corp., NN-ATS Logistics Management & Holdings Co. Inc. and Special Container and Value Added Services Inc. The company also owns 33 percent of MCC Transport Philippines Inc.
Late last year, a local court has directed the group of Uy and the Tagud family-led Negros Holdings Management Corp. (NHMC) and KGLI-NM Holdings Inc. to proceed to arbitration to resolve their dispute.
The dispute arose from Udenna’s petition to enforce its rights as a shareholder of defendant KGLI-NM. The Tagud group had been contesting Uy’s entry as a shareholder.
