In a complex international transaction involving Chinese and U.S. law, food service giant Rich Products Corp., planned to sell subsidiary KangXin Logistics (KXL), which operates a number of temperature-controlled distribution centers in China, to China Merchants Americold Logistics Co. (CMAC). CMAC is a joint venture between China Merchants Holdings (International) Co., Ltd., and Americold Realty Trust. Americold is the world’s largest cold-chain logistics operator. The approximately $90 million deal also involves CMAC acquiring 70 percent of China Merchants International Cold Chain.
The various agreements were subject to U.S. law on certain issues, and Chinese law, generally, and involved coordination with Chinese counsel and a significant number of Chinese regulatory approvals. The principle issues that had to be solved revolved around the closing risks presented by the regulatory framework in China and the customary closing conditions in a normal U.S. based transaction.
The sale of KXL, which is China’s premier third-party cold-chain logistics provider company (3PL), provided Rich’s with additional resources to further expand its core food manufacturing business. KXL will continue to have Rich’s as a customer, providing the logistics support necessary to meet Rich’s growing distribution requirements.