Chinese supply chain and logistics service provider JD Logistics plans to acquire Deppon Logistics Co. Ltd. for $1.4 billion, in a move to grow its capabilities in less-than-truckload (LTL) and full truck load (FTL) transportation, delivery services, and warehousing management, the company said Sunday.
Pending approval of various closing conditions, JD Logistics will buy 99.99% of the equity interest in Ningbo Meishan Baoshui Area Deppon Investment Holding Company Limited, which in turn holds a total of approximately 66.50% of the issued share capital of Deppon. In addition, JD Logistics will make a general offer for all tradable shares of Deppon, a company of 120,000 employees which is listed on the Shanghai Stock Exchange.
JD Logistics is a unit of JD.com, China’s largest online retailer and a technology vendor that offers brands access to its vast infrastructure through a “retail as a service” model. The division operates over 1,300 warehouses, which cover an aggregate gross floor area of over 258 million square feet.
Both the logistics division and its e-commerce parent have large resources. For the 2021 fiscal year ending December 31, JD Logistics had net revenue of $16.4 billion for an operating loss of $286.7 million. That contributed to its parent company JD.com’s fiscal 2021 results of $149.3 billion in net revenue and $649.8 million in operating income.