Despite regulatory challenges inherent in a cross border investment, Tractus assists Werner Enterprises acquire a minority stake in Hercules Logistics Co., Ltd., a rapidly growing logistics and transportation company, to create a trans-Pacific partnership for the benefit of both of the companies’ customers and stakeholders
Hong Kong, November 20 – Notwithstanding numerous regulatory hurdles involved in making a cross-border equity investment into China, there are available pathways for foreign companies seeking to make strategic investments into local Chinese companies.
In general, a foreign company’s investment into equities of a Chinese company, especially a public company, is highly restricted. There are numerous capital and regulatory constraints that companies must meet ahead of the numerous requisite government agency approvals. As Werner Enterprises was looking to formalize a longstanding relationship with Hercules, Tractus was brought in to assist Werner in negotiating and structuring the transaction.
Speaking shortly after the announcement by Werner and Hercules, John Evans, Tractus Asia Managing Director, summarized what the Werner-Hercules deal means for others, “This transaction was certainly challenging as the National Equities Exchange and Quotations (NEEQ), the board for listing SMEs, is relatively new and the regulatory framework for these types of transactions was not yet in-place. It was great to work with both companies who were committed to finding a pathway to formalizing their partnership, despite the regulatory hurdles.”
Tractus was brought in to undertake detailed due diligence, negotiate the share transfer agreement on behalf of Werner and execute the transaction. After considering numerous available options, Werner made the purchase through the establishment of a new company in the Shanghai Free Trade Zone (SFTZ). Tractus assisted Werner to establish the subsidiary in the SFTZ and purchase the shares through the NEEQ.
Established in 1956, Werner Enterprises, Inc. is a premier transportation and logistics firm, with coverage across North America, Asia, Europe, South America, Africa and Australia. Werner’s global headquarters is in Omaha, Nebraska and the company maintains offices in the United States, Canada, Mexico, China and Australia. Werner is a top five truckload carrier in the United States, with a wide range of transportation services including dedicated van, temperature-controlled and flatbed; medium-to-long-haul, regional and local van; and expedited services. Werner’s Value Added Services portfolio includes freight management, truck brokerage, intermodal, and international services. International services are provided through Werner’s domestic and global subsidiary companies and include ocean, air and ground transportation; freight forwarding; and customs brokerage.
Hercules Global Logistics Co., Ltd., is one of the largest and rapidly growing logistics companies in China. Established in 2001, it is recognized as one of the top 100 logistics companies in China and the most respected brand in Shenzhen, China. Hercules is evolving into a comprehensive logistics solution provider with capabilities in long-haul and port dray trucking services, forwarding and freight management, contact logistics, integrated supply, warehouse distribution and customs brokerage. Hercules was listed on NEEQ on 24 Jan, 2014. (Code 430377, Hercules Logistics)
“Over the past several months, the expertise, local knowledge and experience of Tractus-Asia was essential in enabling Werner to successfully navigate the challenges of culture, communication, pricing, regulations and due diligence to reach this agreement.”
John Steele, Chief Financial Officer”