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DP World Broadens Logistics Reach in Africa

DP World’s cash offer of ZAR66 per share implies an equity consideration of around ZAR12.7bn (around US$890mn). WAM
DP World’s cash offer of ZAR66 per share implies an equity consideration of around ZAR12.7bn (around US$890mn). WAM
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DP World Broadens Logistics Reach in Africa

DP World’s cash offer of ZAR66 per share implies an equity consideration of around ZAR12.7bn (around US$890mn). WAM
DP World’s cash offer of ZAR66 per share implies an equity consideration of around ZAR12.7bn (around US$890mn). WAM

DP World has announced an offer to acquire JSE-listed Imperial Logistics, an integrated logistics and market access company with operations mainly across the African continent and in Europe, Emirates News Agency (WAM) reported.

This will enhance DP World’s capabilities, particularly in Africa, building on its extensive infrastructure of ports, terminals and economic zones. It will also significantly accelerate DP World’s transformation into an advanced logistics company offering end to end supply chain services to the owners of cargo, WAM said Thursday.

DP World’s cash offer of ZAR66 per share implies an equity consideration of around ZAR12.7bn (around US$890mn). It represents a premium of 39.5 percent to the Imperial share price as of 7th July 2021 on the Johannesburg Stock Exchange (JSE) and a 34.2 percent premium to the 30-day volume weighted average price. This transaction is subject to Imperial’s shareholder approval and other customary completion conditions including regulatory approvals.

Imperial is an integrated logistics and market access solutions provider with a presence across 25 countries, including a significant footprint in the high growth Africa market. The Group focuses on fast-growing industries including healthcare, consumer, automotive, chemicals, industrial and commodities. Imperial’s business has been built on long-term partnerships with cargo owners, in addition to serving as a trusted partner to many multinational clients, principals and customers.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: "The acquisition of Imperial will help DP World to build better and more efficient supply chains for the owners of cargo, especially in Africa. Imperial’s operations are complementary to our network of ports, terminals and logistics operations on the continent. Like DP World, Imperial’s biggest asset is its people, and we look forward to welcoming employees of Imperial into the DP World team on successful conclusion of the transaction."

"This transaction will be value-enhancing for Imperial as the business will benefit from DP World’s leading technology, global networks and key trade lane volumes, while enabling us to build on our ‘Gateway to Africa’ strategic and growth ambitions. Combining DP World’s world-class infrastructure such as its investment and expertise in ports on the African continent, with Imperial’s logistics and market access platforms will enable us to offer integrated end-to-end solutions along key trade lanes into and out of Africa, also driving greater supply chain efficiencies, and ultimately enhancing value for all stakeholders,” WAM quoted Mohammed Akoojee, Group Chief Executive Officer of Imperial Logistics, as saying.

The deal will be funded from DP World’s existing available resources. DP World continues to make positive progress on its capital recycling programs and remains fully committed to its leverage target of net debt being below four times EBITDA by the end of 2022.

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China Launches Late Stimulus Push to Meet 2024 Growth Target

FILE PHOTO: A worker works on a building under construction in Beijing's Central Business District (CBD), China July 14, 2024. REUTERS/Tingshu Wang/File Photo
FILE PHOTO: A worker works on a building under construction in Beijing's Central Business District (CBD), China July 14, 2024. REUTERS/Tingshu Wang/File Photo
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China Launches Late Stimulus Push to Meet 2024 Growth Target

FILE PHOTO: A worker works on a building under construction in Beijing's Central Business District (CBD), China July 14, 2024. REUTERS/Tingshu Wang/File Photo
FILE PHOTO: A worker works on a building under construction in Beijing's Central Business District (CBD), China July 14, 2024. REUTERS/Tingshu Wang/File Photo

China's central bank on Friday lowered interest rates and injected liquidity into the banking system as Beijing assembled a last-ditch stimulus assault to pull economic growth back towards this year's roughly 5% target, Reuters reported.
More fiscal measures are expected to be announced before China's week-long holidays starting on Oct. 1, after a meeting of the Communist Party's top leaders showed an increased sense of urgency about mounting economic headwinds.
On the heels of the Politburo huddle, China plans to issue special sovereign bonds worth about 2 trillion yuan ($284.43 billion) this year as part of fresh fiscal stimulus, two sources with knowledge of the matter have told Reuters.
Capital Economics chief Asia Economist Mark Williams estimates the package "would lift annual output by 0.4% relative to what it would otherwise have been."
"It's late in the year, but a new package of this size that was implemented soon should be enough to deliver growth in line with the 'around 5%' target," he said.
Chinese stocks are on track for the best week since 2008 on stimulus expectations.
The world's second-largest economy faces strong deflationary pressures due to a sharp property market downturn and frail consumer confidence, which have exposed its over-reliance on exports in an increasingly tense global trade environment.
A wide range of economic data in recent months has missed forecasts, raising concerns among economists that the growth target was at risk and that a longer-term structural slowdown could be in play.
On Friday, data showed industrial profits swinging back to a sharp contraction in August.
"We believe the persistent growth weakness has hit policymakers' pain threshold," Goldman Sachs analysts said in a note.
As flagged on Tuesday by Governor Pan Gongsheng, the People's Bank of China on Friday trimmed the amount of cash that banks must hold as reserves, known as the reserve requirement ratio (RRR), by 50 basis points, the second such reduction this year.
The move is expected to release 1 trillion yuan ($142.5 billion) in liquidity into the banking system and was accompanied by a cut in the benchmark interest rate on seven-day reverse repurchase agreements by 20 bps to 1.50%. The cuts take effect on Friday and Pan, in rare forward-looking remarks, left the door open to another RRR reduction later this year.

Given weak credit demand from households and businesses, investors are more focused on the fiscal measures that are widely expected to be announced in coming days.
Reuters reported on Thursday that 1 trillion yuan due to be raised via special bonds will be used to increase subsidies for a consumer goods replacement program and for the upgrade of large-scale business equipment.
They will also be used to provide a monthly allowance of about 800 yuan, or $114, per child to all households with two or more children, excluding the first child.
China aims to raise another 1 trillion yuan via a separate special sovereign debt issuance to help local governments tackle their debt problems.
Bloomberg News reported on Thursday that China is also considering the injection up to 1 trillion yuan of capital into its biggest state banks.
Most of China's fiscal stimulus still goes into investment, but returns are dwindling and the spending has saddled local governments with $13 trillion in debt.
The looming fiscal measures would mark a slight shift towards stimulating consumption, a direction Beijing has said for more than a decade that it wants to take but has made little progress on.
China's household spending is less than 40% of annual economic output, some 20 percentage points below the global average. Investment, by comparison, is 20 points above but has been fueling much more debt than growth.
The politburo also pledged to stabilize the troubled real estate market, saying the government should expand a white list of housing projects that can receive further financing and revitalize idle land.
The September meeting is not usually a forum for discussing the economy, which suggests growing anxiety among officials.
"The 'shock and awe' strategy could be meant to jumpstart the markets and boost confidence," Nomura analysts said in a note.
"But eventually it is still necessary for Beijing to introduce well thought policies to address many of the deep-rooted problems, particularly regarding how to stabilize the property sector."