SG Holdings will acquire Phat Loc Express to expand delivery operations in Vietnam. Photo:
Japan-headquartered SG Holdings will acquire Vietnamese delivery service company Phat Loc Express, aiming to strengthen its foothold in the Southeast Asian country where online shopping is growing rapidly.
Japan's SG Holdings, the parent of Sagawa Express, will buy all of Phat Loc's shares from management, the Nikkei Asian Review reported.
In a related development, Vingroup
, the country’s largest real estate developer and major retailer, has announced the divestment of 79.96% from Phat Loc Express, formerly known as Vinalinks JSC.
Established in 2001, Phat Loc Express has roughly 60 branches that cover deliveries across the country. The Vietnamese company posted sales of over $9 million in 2015, and the purchase price likely will be a similar amount, according to Nikkei.
Phat Loc Express, Vietnam’s fifth-largest delivery service company, occupies a market share of just a few percent and is dwarfed by three foreign majors namely DHL Express, UPS and FexEx.
SG Holdings began deliveries in Vietnam via a local subsidiary in 2012. The company handles its own deliveries in Ho Chi Minh City
but contracts local businesses for other regions.
The Japanese group entered an agreement with Vingroup in November. Under terms of the agreement, SG Holdings will deliver products for the group's supermarkets and convenience stores.