Sinotrans announced that it will buy the forwarding, warehousing and customs brokerage operations and other assets from its parent company Sinotrans Group for CNY1.1 billion (US$146 million), Xinhua reported.
Sinotrans has signed an agreement with Sinotrans Group. The target assets, which are scattered in mainland China's Shandong, Guangdong, Sichuan, Chongqing, Anhui, Jiangxi provinces and Hong Kong, have a net value of CNY774 million.
Before the acquisition, Sinotrans Group must reorganise the assets and set up a target company whose core business is international freight forwarding, global express, warehousing, shipping agent services and port operations.
Sinotrans will pay 30 per cent in 30 days after Sinotrans Group sets up the target company, and will pay the remaining 70 per cent in 180 days after that.
Sinotrans said the acquisition will cement the company's leading position in the domestic market and widen the geographic scope of its operations, helping it provide higher quality service.
Separately, the Ministry of Communications is investing CNY15 billion in Yangtze River transport facilities as more cargo is expected to be shipped by waterways. Sinotrans expects the acquisition of business in Sichuan, Chongqing, Anhui and Jiangxi provinces.
Analysts pointed out that the acquisition of the operations in Guangdong and Shandong, two coastal provinces, will allow the company to link its network from seaports to hinterland areas while the acquisition of Hong Kong operations will help it expand globally.