Chinese retail giant JD.com (JD) and alternative asset management company Apollo Global Management (APO) have emerged as the leading contender for the acquisition of British parcel delivery company Evri.
It was reported earlier this year that the owners of Evri were considering a potential sale of the company.
In the last 5 years, the company has tripled in size. This came on the back of increased demand during the pandemic and international expansion. The tough economic conditions have hurt them though. As people in Britain cut down on their expenses, the business has suffered.
As a result, the owners are hoping to sell the company for a price tag of 2 billion pounds (about $2.5 billion). This price tag also includes the debt of the company.
Global players show interest in Evri acquisition
JD and APO aren’t the only two companies showing interest in the Evri acquisition. Polish parcel locker firm InPost and Cainiao, the logistics arm of Alibaba, are also interested in the company. No firm, however, has made a public announcement about their intention. This has made it hard to judge which company is more desperate than the other.
A reminder of course that JD already works with Evri through JD Logistics, its logistics arm. The agreement was signed earlier in the year with the purpose of bridging the gap between European brands and the Chinese market.
While this does not necessarily mean that JD is a favorite for the acquisition, it does tell us that JD is serious about the deal.
Evri ownership structure
As of now, Evri is owned by the private equity firm Advent, which holds a 75% stake in the company. The remaining 25% is held by the German mail order company Otto Group.
In 2022, Advent rebranded Evri from its previous name Hermes. It had taken a majority stake in Hermes UK in 2020, together with a 25% stake in Hermes Germany.
If JD comes through as the successful bidder, it will give them more influence in the European market. Not only will the company be able to bring more European brands to China, it will also help them get a foothold in the delivery services in Europe. Eventually, it will help them bring Chinese brands to Europe as well.
JD has 600 million active users in its marketplace. Any European brand would want to have a piece of that. That is why JD seems likely to be the one that wins the bid as the business can make great returns on this transaction, even if it overpays.
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