The partnership between Kuehne + Nagel and Sembcorp Logistics (Semblog) has been terminated ahead of the December 2005 date contained it the companies’ initial agreement. A major problem with the agreement, said Transport Intelligence, was Kuehne + Nagel’s inability to develop its presence in China as quickly as the company would like.
Kuehne + Nagel had received a Class A license from Chinese authorities which allows it to establish wholly owned operations. It’s agreement with Semblog did not allow Kuehne + Nagel to compete with its own third party logistics operation in China.
An additional factor, says Transport Intelligence is Kuehne + Nagel’s recently formed relationship with Japanese forwarder Kintetsu.
As the complex shares deal that established the relationship between Semblog and Kuehne + Nagel is dissolved, Semblog will show substantial gain. Semblog’s initial stake was approximately $377 million. Income from selling the shares is expected to be $778 million.