Allcargo to buy 44% stake in Gati for Rs 416 crore

Further, the board of Allcargo also approved to make an open offer for the acquisition of 3,17,42,615 equity shares representing 26 percent of the

paid-up voting equity share capital (post preferential issue and vesting of stock option) of Gati at a price of Rs 75 apiece. Allcargo will end up with a 44.6 percent stake in Gati if the open offer is fully subscribed.

With this acquisition, Allcargo proposes to enter the express supply chain industry.

“The company offers intermodal integrated supply chain solutions leveraging technology and 20,000+ pin code network and therefore the company intends to extend support to continue and expand the existing business activities in the same line through exercising effective management over Gati,” Allcargo said in the regulatory filing on Thursday.

Gati Ltd is a major player in express distribution (surface, air and rail parcel), supply chain management solutions, value-added transportation solutions, e-commerce logistics, cold chain logistics, freight forwarding segments, operation of fuel stations, domestic and international trading, and logistics parks.

"With Allcargo's existing strength in the ocean transportation business and Gati's expertise in land and air transportation segments, we are now in a unique position to offer our customers a suite of truly multimodal solutions," said Shashi Kiran Shetty, Chairman, Allcargo.

Allcargo expects the acquisition to be completed by March 30, 2020.

With this acquisition, Allcargo is also entering into a strategic relationship with Japanese freight forwarder Kintetsu World Express, which owns 3.99 percent in Gati. "This partnership will allow Allcargo and Kintetsu to jointly explore and pursue further collaborations within and outside the country," Shetty said.