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Dalian Port to acquire Yingkou for USD 2.39bn
Posted on Wednesday, 08 July 2020 08:04
Dalian Port PDA has entered into an agreement to take Yingkou Port Liability private by way of an all-scrip deal worth CNY 16.77 billion (USD 2.39 billion).

The offer exchange of 1.51 new A shares for every one stock held equates to a price of CNY 2.59 each.

Ying Kou Port Group owns 78.3 per cent of Yingkou and will end up with 33.8 per cent of Dalian Port following the takeover.

The Liaoning Port Group subsidiary has applied for, and has been granted, a waiver from making a mandatory general offer for the enlarged entity.

Yingkou is mainly engaged in terminal and other facility operations, cargo stevedoring, warehousing, ship port activities, facility equipment and machinery rental, and maintenance services.

Net asset value attributable to equityholders totalled CNY 12.35 billion, as at 31st December 2019 (31st December 2018: CNY 11.64 billion).

It had pre-tax profit of CNY 1.35 billion in the 12 months ended 31st December 2019 (FY 2018: 1.34 billion) and net profit of CNY 1.01 billion (FY 2018: CNY 1.00 billion).

As a unified operation platform of port logistics business in Dalian area, Dalian Port is one of the largest comprehensive harbour operators in northeast China.

The company is principally engaged in terminal and related services within the oil/liquefied chemical, container, bulk and general cargo, bulk grain, passenger and roll-on and roll-off categories.

China Merchants Group is the ultimate beneficial owner of both Dalian Port and Yingkou.

Beijng intends to form five port groups in the Bohai Rim, Yangtze River Delta, Southeast Coast, Pearl River Delta and Southwest Coast as part of Beijing’s proposal to build a national coastal harbour layout.

In addition, the infrastructure will incorporate the layout of eight networks for the transportation of coal, oil, iron ore, containers, grain, commercial vehicles, in-land roll-roll shipment and passengers.

Among them, the port clusters in the Bohai Rim region are mainly composed of coastal hubs in Liaoning, Tianjin-Hebei and Shandong.

In recent years, overcapacity in the area, serious homogenisation of services, and intensified vicious competition have seriously restricted the industry’s overall development.

The possible merger of the two ports’ existing facilities and their distribution networks will create an international logistics centre in northeast Asia that will support asset scale expansion and business growth.

Zephyr, the M&A database published by Bureau van Dijk, shows 47,514 deals have been announced globally in 2020 to date.

Of these, 37 target companies providing support activities for water transportation.

The largest is the acquisition of the remaining 19.5 per cent stake in DP World by Dubai World’s Port and Free Zone World for USD 7.87 billion.

Dalian Port’s potential takeover of Yingkou would be the sector’s third-biggest deal, following on from AustralianSuper’s purchase of a quarter of Peel Ports Group for USD 5.17 billion.

© Zephus Ltd