JWD will issue 791m new shares, swap them for a 100% stake in SCGL, and change its name to SCGJWD. We expect the merger to boost both earnings and EPS. And there’s scope for upside to our earnings forecasts and target price from potential synergies.
JWD to merge with SCGL
JWD will issue 791m new ordinary shares (at Bt24.02/share, implying a total investment value of Bt19bn) and swap them of a 100% stake in SCG Logistics Management Co Ltd (SCGL), which is 98.2%-owned by Siam Cement Plc (SCC). The transaction should be completed during 1Q23. JWD will change its name to SCGJWD. The merger will make SCGJWD the biggest regional integrated logistics and supply-chain service provider in ASEAN in terms of revenue and earnings, with operations in eight countries. The merged entity’s ability to compete in logistics space will be enhanced by economies-of-scale—lower costs, new investment oppor-tunities, its capital structure will strengthen, and its scope to offer services and products to customers will broaden.