CDH was advisor to the multi-jurisdictional acquisition by Kuehne+Nagel

In a recent transaction exemplifying the close collaboration between, and business opportunities arising from, our SA and Kenya offices, CDH was appointed to advise the existing shareholders of the Morgan Cargo Group, one of the largest logistics businesses in Africa (with its main operations based in SA), in the multi-jurisdictional acquisition by Kuehne+Nagel (a Fortune 500 company and one of the biggest logistics businesses in the world) of a majority shareholding in the Morgan Cargo Group. The corporate finance advisors to the Morgan Cargo Group, Pallidus Capital, engaged our Sandton office, as legal advisors to the Morgan Cargo Group and one of the key considerations for securing such engagement was our strong presence in Kenya, given that a significant part of the Morgan Cargo Group's business is operated out of Kenya.

Njeri Wagacha lead the Kenya team and also advised on certain UK aspects being an admitted solicitor in the UK.

As a prime example of the Power of One, our Sandton and Kenya offices worked seamlessly in advising our client as one firm being able to render legal services in all of the applicable jurisdictions, resulting in prompt service delivery, clear communication and cost savings to client. Given the strong growth of the Kenyan economy and the major role it plays in the East Africa market, it is foreseen that more and more of such collaboration opportunities will arise in the near future.

The CDH South Africa transaction team included Roux van der Merwe, Tamarin Tosen, Albert Aukema, and Reece May.

The CDH Kenya transaction team comprised of Njeri Wagacha, Joan Kamau, Melisa Wekesa, and Billy Oloo.

Kuehne+Nagel was advised on the transaction by Bowmans SA and Bowmans Kenya.

Summary of the SA Transaction

CDH Sandton advised the various South African shareholders of the Morgan Cargo Group on a pre-acquisition restructure (involving various repurchase and distribution transactions) in order to achieve an optional tax regime for purposes of the main transaction and advised such shareholders on the acquisition (by way of a subscription for shares in a newly established group holding company) Kuehne+Nagel of a 51% interest in the Morgan Cargo SA with certain earn-out arrangements entitling such shareholders to exit their remaining 49% interest over a 3 year period. Such advice also entailed the shareholder arrangements applicable between the parties until the current shareholder's exit in full at the expiry of the earn-out period.

In addition, CDH Sandton assisted the parties in obtaining approval and clearance from the SA Competition Authorities for purposes of the transaction which entailed various complex interactions with such authorities given that both the merging parties were major logistics companies with material market shares. 

Summary of the Kenya Transaction

CDH Kenya advised both Bataleur Investments Limited, the investment vehicle through which the current South African shareholders hold their respective interests in the international operations of the Morgan Cargo Group (Bataleur), and Morgan Air & Seafreight Logistics Kenya Limited, the Kenyan operational company of the Morgan Cargo Group (MC Kenya), in obtaining approval and clearance from the Competition Authority of Kenya on the proposed merger and acquisition with Kuehne + Nagel Limited (KN Kenya). The CDH Kenya team further advised in the creation of the B Shares in the authorised share capital of MC Kenya and the subscription of the B Shares by Bataleur.

CDH Kenya advised both Bataleur and MC Kenya in the sale of the ordinary shares of MC Kenya to KN Kenya.

This transaction involved the acquisition of MC Kenya by KN Kenya for an estimated Sh8 billion, marking it as one of the largest transactions in the logistics industry. On the first phase of the transaction, MC Kenya issued Bataleur with B Shares, comprising of forty nine percent (49%) of the total issued shares of MC Kenya. On the second phase of the transaction, KN-Kenya acquired the ordinary shares in MC Kenya from Bataleur, comprising fifty one percent (51%) of the total issues shares of MC Kenya.

Summary of the UK Transaction

CDH Kenya advised both Bataleur and Morgan Cargo Limited, the UK operational company of the Morgan Cargo Group (MCUK), in the creation of B Shares in the authorised share capital of MCUK and the subscription of the B Shares by Bataleur. CDH further advised in the sale of the ordinary shares of MCUK to Kuehne + Nagel UK Limited (KNUK).

For the first phase of this transaction, MCUK issued Bataleur with the B Shares, comprising of forty nine percent (49%) of the total issued shares of MCUK. On the second phase of the transaction, KNUK acquired the ordinary shares in MCUK from Bataleur, comprising fifty one percent (51%) of the total issued shares of MCUK.