ComfortDelGro (CDG) is bolstering its presence in Australia with the acquisition of A2B Australia (A2B), an Australian-listed taxi operator, which provides payment solutions as well.
ComfortDelGro, which already owns 9.25% of A2B, is offering A$1.45 ($1.30) per share for the remaining shares, valuing the target company at A$182 million.
The aggregate consideration of A$165.1 million is to be funded through existing cash and bank facilities.
Concurrently, A2B announced a special dividend of 60 Australian cents per share, expected to be paid on Jan 30, 2024.
The transaction will be implemented through a court-supervised scheme of arrangement, subject to various approvals, such as shareholders' approval and an independent expert's report confirming the scheme's alignment with the best interest of A2B shareholders.
The transaction is anticipated to conclude in the first half of 2024, pending regulatory approvals, with the A2B shareholder vote scheduled for late March 2024.
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ComfortDelGro already runs a fleet of more than 4,000 vehicles in Australia including both buses and taxis. A2B, on the other hand, has more than 8,000 vehicles in its network.
Cheng Siak Kian, ComfortDelGro C52 ’s managing director and group CEO, says the acquisition aligns with the company’s strategy of expanding its point-to-point mobility business in key markets.
“As a leading taxi network in Australia, A2B is highly complementary to our business.
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"Its fundamentals are attractive, with a proven track record of expansion driven by underlying growth in customer demand and driver supply. It will also allow for diversification of our offerings in Australia, transforming ComfortDelGro Corporation Australia into a national multi-modal mobility player,” says Cheng.
Mark Bayliss, A2B executive chairman, agrees: “While ComfortDelGro is one of the world’s largest land transport companies, it also has a long-standing relationship with A2B as a major shareholder. We therefore believe this transaction will further strengthen our A2B business as it is a great match of two remarkable companies offering complimentary services and markets.”
As at 11.30am, shares in CDG are trading one cent higher or 0.74% up at $1.37.
