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Last Updated : Dec 11, 2019 05:58 PM IST | Source: Moneycontrol.com

Future Supply Chain sells 22% stake to Nippon Express for Rs 641 crore

The Future Group's logistics arm will issue 3.78 million shares to Nippon Express at a price of Rs 664 per share

 
 
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Future Supply Chain Solutions Ltd (FSC), promoted by Kishore Biyani's Future Group, will sell 22 percent stake to Japanese logistic firm Nippon Express for Rs 641 crore, said a top official.

According to the transaction, the Future Group's logistics arm will issue 3.78 million shares to Nippon Express at a price of Rs 664 per share, said Mayur Toshniwal, Managing Director, Future Supply Chain.

Future Supply Chain, incorporated on March 8, 2006, is a third-party logistics service operator in India and covers the entire gamut of supply chain across the logistics value chain including smart warehousing, transportation, and distribution system and temperature-controlled logistics.

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FSC largely serves consumption-driven sectors like fashion, footwear, food, FMCG, electronics, and furniture.

As of September 30, 2019, FSC operates through 90 distribution centers across India, covering around 8.33 million sq. ft. of warehouse space.

Its hub-and-spoke distribution model comprises 13 hubs and 132 branches across India.

A hub and spoke network is a centralised, integrated logistics system designed to keep costs down. Hub and spoke distribution centers receive products from many different origins, consolidate the products, and send them directly to destinations

Nippon Express and Future Supply Chain will jointly start the business collaboration from January 2020.

Nippon Express established in 1937 is a global logistics company that provides land-sea-air service across 711 bases in 308 cities in 48 countries. It is expanding the storage and transport of goods worldwide. The consolidated annual sales about $ 20 billion.

The warehouse operates around 10 million square meters, with approximately 3,050,000 square meters overseas.

Both companies will jointly explore growth opportunities for new and existing customers based on their strategic partnership and business collaboration and expand ventures.

The partnership will also jointly leverage Nippon Express' competency in diverse sectors for the Indian market.

Future Supply Chain and Nippon Express will formalise a steering committee to oversee the objectives set by both the companies.

"We hope to increase our sales outside Japan from our current sales of US$ 4 billion to US$ 12 billion by 2028 and become a proud world-class logistics company," said Satoshi Horikiri, Senior Managing Executive Officer, and Chief Managing Officer of International Business Headquarters at Nippon Express.

Nippon Express and FSC have received all necessary approvals with respect to Nippon Express' acquisition of 22 percent stake in FSC, announced on September 20, 2019. This includes approval from the Competition Commission of India, FSC shareholders, BSE Ltd and the National Stock Exchange of India Ltd.

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First Published on Dec 11, 2019 05:58 pm
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