China’s acquisition-happy HNA has captured global headlines again this week with its S$1.39 billion ($990 million) offer for Singaporean logistics services company CWT. Should the mainland conglomerate succeed in that nearly-billion dollar buy, HNA would also instantly make itself a player in the warehouse world, as the deal would include CWT’s portfolio of 16.4 million square feet (1.5 million square metres) of logistics real estate owned or operated by CWT globally.
As HNA pointed out in its statement to the Hong Kong stock exchange announcing the CWT offer, the Singaporean-listed company is one of the largest owners and operators of warehouse and logistics real estate in the southeast Asian financial hub.
CWT manages approximately 10.3 million square feet of owned and leased warehousing space in the Lion City as of December 31, 2016. Operating commodity marketing, logistics, financial and engineering services in 90 countries, CWT also manages around 6.1 million square feet of warehouse space outside of Singapore.
Among CWT’s warehouse interests is a 2.4 million-square-foot integrated logistics mega-hub in Singapore’s Jurong port area, announced in 2014 and slated for completion in the first half of this year. Also, among the company’s more niche holdings is Singapore’s Wine Vault, the largest of its kind in Southeast Asia at 750,000 square feet and capable of housing 10 million bottles.
CWT Could Be Up for Privatization with HNA at the Helm
HNA has reserved the right to privatize CWT, according to the statement to the Hong Kong Stock Exchange, a not unexpected move from the real estate giant. When the deal was in its early stages in October, HNA was suspected of moving to take over controlling shareholder C&P Holdings in order to trigger an automatic general offer for the remaining shares in CWT.
Established in 1970 as a private arm of the Port of Singapore Authority (PSA), CWT’s shareholders include chairman Loi Kai Meng and his son Loi Pok Yen and the interests of Liao Chung Lik and Lim Soo Seng; together, these parties own 65.1 percent of CWT.
Apart from CWT’s logistics services – which include both freight logistics and defense – the company owns 40 percent of ARA-CWT Trust Management (Cache) Limited, the REIT manager of S$788 million Singapore-listed Cache Logistics Trust. The REIT manager was set up as a joint venture with real estate investment specialists ARA Asset Management Limited.
Acquisitive HNA’s Shopping Spree Continues with OBOR Arm
Details of a deal between HNA and CWT have been swirling since it was first announced that HNA was seeking a controlling stake in the company last year, but the deal was delayed at least in part due to HNA being unsure which of its subsidiaries would make the offer.
The offer on Sunday fell to HNA Belt and Road Investments, which stated the acquisition would serve the goals of China’s One Belt, One Road initiative.
If the deal goes through, HNA will have struck more than $40 billion in deals in little more than two years. Since the start of the year, HNA has been linked to at least a dozen M&A situations, according to FT research. Just last week, HNA was said to be in talks to acquire the venues division of the UK’s Capital & Countries Properties, and is said to be in contract with an unnamed partner to buy a $2.2 billion Manhattan skyscraper in late March.