Top Chinese e-tailer JD.com (NASDAQ:JD) is doing a bit of shopping of its own. The company announced Friday that it has signed an agreement to buy a controlling stake in Kuayue-Express Group, a privately held logistics business. The deal is valued at 3 billion yuan ($365 million), with which JD.com will buy both existing and newly issued shares of Kuayue.
The move will strengthen JD.com's presence in the logistics field, which should, in turn, bolster its core retail activity. Technically, the company's subsidiary Jingdong Express Group (also known as JD Logistics) is the entity purchasing Kuayue.
JD.com's upcoming acquisition was founded in 2007. Kuayue's vehicle fleet is around 15,000 strong, and it operates 11 charter flights daily in China. The company handles around 300,000 deliveries daily.
"Collaborating with Kuayue Express advances our integrated supply chain management, technology initiatives, and service expansion to third party merchants," JD.com quoted JD Logistics CEO Zhenhui Wang as saying. "We will leverage our respective advantages and the synergy the collaboration creates to enhance the client experience and increase overall supply chain efficiency for JD and society at large."
JD.com did not specify how large a majority stake in Kuayue it is acquiring. The company expects the deal to close in the third quarter of this year.
The Chinese e-commerce market continues to be robust. While JD.com is a major player, the sector is quite competitive, particularly as it's led by behemoth Alibaba.
Following news of the Kuayue deal, JD.com's shares dipped by 0.8%, a slightly steeper decline than that experienced by the S&P 500 index.