Leading Chinese e-commerce firm JD.com is reportedly in talks to obtain a controlling stake in China Logistics Property Holdings, one of the country’s largest shipping and warehouse companies.
The deal, which has yet to be confirmed by the company representatives, caused the share price of China Logistics to surge almost 14% in Thursday trading at the Hong Kong Stock Exchange before receiving a suspension in trading for the day.
Friday morning in Hong Kong saw China Logistics stocks drop 5.7% to HK$3.98 ($0.51) per share at around midday.
Meanwhile, Chairman of China Logistics Li Shifa, who holds a 26.38% share in the company via his own investment firm, is reportedly in negotiations with an unnamed buyer regarding the purchase of shares.
Shanghai-based China Logistics was founded in 2000, expanding since then to become one of the largest domestic logistics firms. As of December last year, the company had developed 65 logistics parks across the country, accounting for a total floor area of more than 6.2 million square meters, according to its official website.
Speaking in June of the extensive growth in China’s logistics sector over the past two decades, Mr. Li said that the “sustained development of the national economy, the continuous upgrading of residents’ consumption, the rapid development of e-commerce, the increasingly prosperous new retail model and the strong growth of cold chain logistics and other positive factors” have collectively propelled the firm forward.
Founded under its previous name of Jingdong in 1998 by billionaire entrepreneur Richard Liu, JD.com currently has a market cap of over $115 billion.
If confirmed, the acquisition of shares in China Logistics would mark a further development in the expansion of JD.com’s brand within the domestic logistics industry. Earlier this month, domestic regulators approved the establishment of a new cargo airline backed by Mr. Liu called Jiangsu Jingdong Cargo Airlines.