Nasdaq-listed TD Holdings (Nasdaq: GLG) announced on Wednesday that it has entered into a non-binding letter of intent to acquire Shenzhen Tongdow Internet Technology (STIT), another Chinese online to offline e-commerce commodities trading platform.
Under the signed agreement, TD Holdings intends to acquire between 30 percent and 65 percent of the equity interests of STIT. The deal will be closed with a cash transaction, but the amount will be determined after further due diligence.
However, both parties have already agreed on the estimation of STIT equity value to be between $145 million and $180 million.
The companies are expecting to close the acquisition deal by the end of June next year, but that will depend on the due diligence process and the signing of a definitive agreement.
Future-Proofing Commodities Trading
The prospect of the acquisition came as a part of TD Holdings’ strategy to bring digitization to commodities trading, thus making the industry future-proof.
“We are excited about this potential transaction, and we believe it will bring significant benefits to us as it will help the Company complete the strategic digital technology transformation of commodity trading, optimize cash flow turnover and improve profitability,” said Renmei Ouyang, CEO at TD Holdings.
“Our goal is to build an ecosystem of digital e-commerce platforms through the digital management and operation of global commodities trading and the construction of 5G smart warehouses and to provide comprehensive services to meet the customers’ needs. We expect that the gross merchandise volume (GMV) of commodity trading transactions on our platform will continue to grow and increase our bargaining power of commodities pricing in the international market.”
Source: Read Full Article