Port operator China Merchants Group has acquired a controlling stake in Australia's Loscam Ltd as it enters the pallet pooling business.
The Hong Kong-based company did not disclose the size of the stake nor the value of the deal but media reports suggested the company was worth between US$650 million and US$700 million.
Loscam is a leading provider of pooling service for pallets and packaging in Australia, southeast Asia and China. Pallets are the most basic form of transport and storage equipment in the logistics sector and is still relatively infant in China.
"With the development and modernization of the retail sector and supply chain management as well as the continuous and further implementation of the national pallet standardization policy, this sector possesses an enormous growth potential," China Merchants said yesterday in a statement on its website.
The firm added that the sector "is also expected to create strong synergies with the existing port and logistics business of the group."
The purchase is China Merchants' entry into the pallet pooling industry and Loscam is its first major overseas acquisition outside Asia.
China Merchants Group is a state-owned conglomerate with more than US$39 billion worth of total assets by December 31, 2009.
