X

UPS to acquire Logen to expand in Korean market

By Won Ho-jung
Published : April 26, 2017 - 14:43
US-based logistics company UPS will acquire local logistics firm Logen to expand its presence in the Korean market, according to news reports Wednesday.

UPS is said to have agreed to a 270 billion won ($240.2 million) deal with Baring Private Equity Asia to acquire 100 percent of Logen’s shares. 

Employees sort packages at UPS Korea’s Docksan Center. (UPS)


A spokesperson for UPS declined to comment on the deal when reached by The Korea Herald.

This will be UPS’ second foray into the Korean logistics market. The company first entered the market in a joint venture with Daehan Logistics in 1999, which then broke away to operate as a wholly owned company in 2008.

Logen is the fifth-largest player in the highly competitive logistics market that has seen 44 percent growth in the past five years to reach 4.8 trillion won, buoyed by increasing demand fueled by e-commerce.

Logen’s 7.3 percent market share will expand UPS’ presence in the Korean market, where it already operates international express mail services.

However, industry analysts say the acquisition is unlikely to have a significant impact on top domestic players in the logistics market including market leader CJ Logistics.

“In the long term, the synergy that can be created by UPS’ acquisition of Logen is the use of UPS’ EMS to penetrate the direct overseas purchases market. However, the integration of the two companies’ systems will take at least a year, minimizing the impact on larger existing companies,” wrote analyst Park Kwang-rae for Shinhan Investment.

Park also highlighted that while other companies target the business-to-consumer market, Logen has focused mostly on the consumer-to-consumer market. According to Park, this means the price per parcel at Logen would be higher than at other companies, making it difficult for UPS to immediately break into the lucrative business-to-consumer market. 

By Won Ho-jung(hjwon@heraldcorp.com)

MOST POPULAR

More articles by this writerBack to List