Jardine Matheson has, on July 1, reached an agreement with Zhongsheng Group Holdings to strengthen the strategic partnership between both companies.
Zhongsheng Group Holdings is a leading automobile distribution group in China whose shares are listed on the mainboard of the Hong Kong Stock Exchange (HKEx).
Under the agreement, Jardine Matheson will transfer to Zhongsheng its Mercedes-Benz auto dealership business operating in the Chinese mainland under the Zung Fu brand.
Jardine Matheson will also increase its shareholding in Zhongsheng to 21.25%, solidifying its position as the second largest shareholder in the group after Zhongsheng’s founders.
Jardine Matheson’s auto dealership business in China consists of its ownership in Zung Fu Group and its stake in Zhongsheng.
The agreement will enable Jardine Matheson to consolidate its investment in the sector.
The move will also allow Jardine Matheson to better position its business in mainland China for growth.
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The group will continue to be represented on the board of directors of Zhongsheng through non-executive directors.
“We see tremendous potential for both Zhongsheng and Jardines to benefit from the strengthening of our strategic relationship. By integrating and aligning with one of China’s premier automobile distribution groups, Jardines will enjoy an enhanced presence in China’s rapidly evolving auto sector,” says John Witt, group managing director of Jardine Matheson.
Huang Yi, chairman of Zhongsheng adds, “We are excited about the synergies to be generated from this strategic partnership and look forward to deepening our co-operation with Jardines across China. The addition of Zung Fu China will greatly enhance our presence in Southern and Western China as well as allow us to benefit from Zung Fu’s market-leading operational and management expertise.”
Shares in Jardine Matheson closed 72 US cents lower or 1.1% down at US$63.20 on July 1.
