Allcargo Logistics Ltd. has entered into a share subscription agreement (SSA) and a share purchase agreement (SPA) with Gati Ltd. and some of its existing promoters and promoter group members to acquire 19.43% stake in the Hyderabad-based logistics company for ₹177.89 crore at ₹75 per share.
As per SEBI’s takeover code Allcargo Logistics has announced an open offer to acquire an additional 26% share holding in Gati from the open market. The offer has been made at ₹75 a share.
If fully subscribed, Allargo will invest an additional ₹238.07 crore to acquire majority control, valuing the total deal at ₹415.96 crore.
On Thursday, the board of Gati approved to raise little more than ₹100 crore by allotting 1,33,33,340 equity shares of face value of ₹2 each of the company at an issue price of ₹75 on a preferential basis to Allcargo Logistics. Further, the existing promoters of Gati entered into a SPA for sale up to 1,03,85,332 shares of the company to Allcargo Logistics at the same price.
These decisions are subject to shareholders approval.
With this acquisition Allcargo Logistics will acquire effective management control of Gati which has a pan-India network reach in surface express. The deal is expected to be completed by March 30, 2020, Allcargo Logistics said in a filing with the stock exchanges.
With this acquisition Allcargo Logistics has forayed into the express logistics space, the company said in a statement.
“The exponential rise in cross-border and domestic e-commerce has opened up new markets for traditional express players such as Gati. With Allcargo’s existing strength in the ocean transportation business and Gati’s expertise in land and air transportation, we are now in a unique position to offer our customers a suite of truly multimodal solutions,” Shashi Kiran Shetty, Chairman, Allcargo Logistics Ltd said in a statement.
“With this strategic deal with Allcargo Logistics, we have entered a new era of consolidation in the domestic express logistics space. This collaboration also reiterates our commitment to ensure maximum outreach across untapped markets and provide benchmarked last-mile delivery solutions to our clients,” said Bala Aghoramurthy, deputy MD, Gati Ltd.
