German logistics major DHL will acquire a majority stake in Blue Dart Express Ltd for Rs 732.50 crore (approximately $162 million). This is DHL's first business acquisition in the Asia Pacific region.
DHL will pay Rs 350 per share for a 68 per cent stake in Blue Dart, which is South Asia's leading integrated air express carrier. The acquisition price is at a premium of 11 per cent over today's closing price of Rs 320.25 on the Bombay Stock Exchange.
DHL will pay Rs 350 per share for a 68 per cent stake in Blue Dart, which is South Asia's leading integrated air express carrier.
Blue Dart shares jumped 5.59 per cent today on news of the acquisition. DHL will also come out with a mandatory 20 per cent open offer, after the proposed acquisition.
According to the terms of deal, signed on Saturday and announced today, DHL will acquire 51 per cent stake from Blue Dart's promoters -- Tushar Jani, Clyde Cooper and Khushroo Dubash -- and a 17 per cent stake from Schroder Capital Partners.
The fund outgo for the acquisition of 16.18 million shares will amount to Rs 566.5 crore, while the purchase of an additional 20 per cent stake (4.75 million shares) will cost the German company another Rs 166.1 crore, taking the total tab to Rs 732.6 crore.
Bryan Jamison, regional director, South East Asia and Indian sub-continent, DHL Express Asia Pacific said, "The deal creates a platform for DHL to build on the capabilities and further expansion of service offerings to the Indian market.
While the operational synergies between the two companies will be exploited, DHL and Blue Dart will continue to operate as separate entities and it will be business as usual for both the companies."
With 4,000 employees and a fleet of five Boeing 737 freighters, Blue Dart services more than 220 countries and runs a network covering 13,700 locations in India. It already has a sales alliance with DHL.
Blue Dart was set up with a capital of just Rs 30,000 by Khushroo Dubash, Clyde Cooper and Tushar Jani in 1983 as Blue Dart Courier Services. It went public in 1994.
Blue Dart onMonday announced that Blue Dart Aviation, the company's arm that houses its fleet comprising 5 aircraft, would be spun-off into a separate entity where DHL would acquire only 40 per cent while Jani and Dubhash would hold the rest.
This is in line with the foreign direct investment (FDI) norms, which limits the maximum FDI in the domestic aviation sector to 49 per cent.
According to Jamison, DHL will be comfortable with an equity holding of 75 per cent of Blue Dart that will continue to be listed on the Indian bourses.
