Delhivery to acquires Ecom Express for Rs 1,400 crore

Mumbai: Logistics services provider Delhivery on Saturday announced acquisition of Ecom Express for a cash consideration of about Rs 1,400 crore to scale up its business.

In a regulatory filing, the company said it has "signed a definitive agreement to acquire a controlling stake in Ecom Express Ltd for a cash consideration of around Rs 1,400 crore from its shareholders".

The company's board approved the "acquisition of shares equivalent to at least 99.4 per cent of the issued and paid-up share capital, on a fully diluted basis, of Ecom Express for a purchase consideration not exceeding Rs 1,407 crore." The board has approved the execution of share purchase agreement amongst the company, Ecom Express, and their shareholders and execution of other necessary documents.

The deal is expected to be completed within the next six months.

The turnover of Gurugram-based Ecom Express stood at Rs 2,607.3 crore in 2023-24 fiscal year as against Rs 2,548.1 crore in the preceding year.

Commenting on the deal, Sahil Barua, MD and CEO of Delhivery, said, "We believe this acquisition will enable us to service customers of both companies better, through continued bold investments in infrastructure, technology, network and people." The founders and management of Ecom Express have established the network and team, creating a strong foundation to integrate into Delhivery's operations, he added.

K Satyanarayana, founder of Ecom Express, said, "Delhivery is among India's leading fully integrated logistics service providers with significant scale advantages and will be the ideal shareholder for Ecom Express' next phase of growth." The completion of the transaction is subject to approval from the Competition Commission of India, and customary closing conditions.

Ecom Express, which was incorporated in August 2012, is an end-to-end technology-enabled logistics solutions provider.

Explaining the rationale of the acquisition, Delhivery said that "logistics is a scale-driven business where economies of scale lead to higher efficiencies, enabling players to provide higher quality services at more competitive prices." This acquisition aims to enhance Delhivery's scale, thereby strengthening its value proposition to clients, the company said.

"The increased scale resulting from this acquisition is expected to allow Delhivery to invest more effectively in improving service quality through network expansion, network quality improvements (such as automation and electric vehicles), technology investments, and research and development (eg, robotics and drones)," it further said.