JD Logistics, a Hong Kong-listed logistics arm of the e-commerce giant JD, has entered an agreement to buy a 67% stake in courier rival Deppon Logistics Co., Ltd. $1.4 billion.
The deal is the latest move by JD in building its logistics infrastructure network, a foundational service for China’s e-commerce market, through external acquisition and investment.
The e-commerce titan has backed many other logistics and delivery companies such as China Logistics Property Holdings Co., Kuayue Express, and Dada Nexus.
Through investments, JD is tapping into different verticals in the logistic and supply chain businesses. Deppon provides “differentiated services” and “the overlap is not much” to JD Logistics’ core business, according to Thomas Chong, an analyst at investment bank Jefferies.
Deppon focuses on large items, freight transportation, and manufacturing customers.
JD Logistic’s other subsidiaries, Kuayue focuses on air freight and enterprise clients, while Dada Nexus focuses on-demand inter-city grocery and parcel delivery to individual consumers.
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