Gati to form JV with KWE of Japan

Supply-chain solutions provider Gati has decided to enter into a joint venture agreement with Japanese firm Kintetsu World Express (KWE). Under the agreement, express distribution supply-chain businesses of both the firms will be merged.

As part of the agreement, Gati will hold 70 per cent stake in the joint venture, Gati-Kintetsu, while 30 per cent will be held by KWE.

Gati's entire express distribution and supply-chain (EDSC) business will move into the joint venture through a business transfer agreement, a process that is likely to take another two months for completion.

The Gati-KWE joint venture is aimed at combining Gati's expertise in third-party logistics and express distribution in the country with KWE's freight forwarding expertise and global customer base.

The venture would also invest in high-end third-party logistics facilities that would include temperature-controlled warehouses.

KWE will invest Rs.267.70 crore for its 30 per cent stake in the joint venture through a combination of primary and secondary acquisition of shares and the funds raised from the transaction would be used to reduce debt.

KWE has a significant client base in Japan, including some of the top companies in electronics and IT industries.