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Logistics

Allcargo set to acquire up to 46.83% equity stake in Gati after SEBI approval

March 6, 2020: Allcargo Logistics is set to emerge as a controlling stakeholder in Gati, as it has received Securities and Exchange Board of India (SEBI) approval on its open offer to acquire approximately 3.17 crore shares or 26% stake in Gati at Rs 75 a share.

The open offer is expected to be launched in March 2020 and closed by April 2020.
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The open offer is expected to be launched in March 2020 and closed by April 2020.

March 6, 2020: Allcargo Logistics is set to emerge as a controlling stakeholder in Gati, as it has received Securities and Exchange Board of India (SEBI) approval on its open offer to acquire approximately 3.17 crore shares or 26% stake in Gati at Rs 75 a share.

On full acceptance of the open offer, it will take Allcargo’s stake in Gati to 46.83 percent. This will mark the completion of the acquisition process which was initiated on December 5, 2019. Allcargo has already deposited Rs 238 crore - equivalent to 100 percent of the capital required to fund the open offer - into an escrow account set up as per SEBI norms for the open offer transaction.

Preferential allotment and part purchase of promoter shares have also been completed by Allcargo in January 2020. As part of this process, two directors of Allcargo have been appointed on the Gati Board.

“The acquisition is in line with Allcargo Logistics’ long-term strategy to strengthen its domestic business. The acquisition will further synergize our efforts to offer end-to-end services to our domestic and international customers. Apart from helping us consolidate our position as the true end-to-end logistics solutions provider, the acquisition will catapult us into the market-leading position in the domestic express logistics segment. It will create a lot of value by leveraging the express logistics business of Gati with our current logistics courier and parcel logistics (CPL) business. We are confident that it will help Allcargo Logistics achieve sustainable growth as a leader in the logistics industry in the short, medium and long run,” said Shashi Kiran Shetty, chairman, Allcargo Logistics.

Depending on the shareholders’ response, Allcargo’s stake in Gati is likely to go up to 46.83%, with the conclusion of this open offer.

Operating an asset-light and hub and spoke model, Gati currently has a presence in 727 districts in India. It has simplified door-to-door express logistics by creating a formidable network serving over 19,000 PIN codes across the country.

With this acquisition, Allcargo will be able to offer single window solutions through a combination of ECU Worldwide and Gati at a scale that otherwise does not exist in India at present.


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