China Post Going Private..

Thursday, November 2, 2006 0:23
Posted in category Uncategorized

Following a line of WTO induced privatizations, China Post is going private (see Forbes or Times Online).One of the last remaining entities directly managed by Beijing, the spinning off is going to be on for the books as it will privatize China’s largest logistics network and its 5th largest bank at the same time.

With respect to both operating groups, M&A teams from the logistics and banking sectors are no doubt running the numbers to see what opportunities may exist. While there have been no rumors of foreign investment, and no one has offered to start one, the number of logistics and banking deals recently announced, closed, and evaluated have been increasing (ANZ Bank, FedEx, Citigroup, Schneider, and others) .

Postal operations plus branded logistics company have been popular models (DHL/ Deutsche – FedEx/ USPS) worldwide, and with the long haul capabilities of China Post being second to none, foreign operators will have to consider the possibilities. If nothing else, they will need to consider what the ramifications would be if one of their competitors should succeed in either investing in or partnering with the new private Post.

On the bank side, with one of the top name brands in China (#2 according to Gallup poll), the new finance company that will be created could significantly improve its position. In addition, with the Postal bank operating more like a depository, it will not be laden with NPLs like the others (ICBC, BoC, Consturction, Ag, or BoComm). At the same time, the infrastructure would be significantly behind (ATM/ Debit/ Credit cards are not widely available or used).

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One Response to “China Post Going Private..”

  1. All Roads Lead To China » USTR Report: Services says:

    December 23rd, 2006 at 3:25 pm

    […] Recently, as highlighted in another post, these requirements were dropped to 150g and China Post was split into different entities as prescribed by WTO. […]