Deutsche Post DHL Group has concluded its deal with SF Holding to transfer its supply chain operations in mainland China, Hong Kong and Macau to the Chinese logistics service provider.

According to DHL, it received approximately €700 million (US$796 million) as part of the transaction, which involves the supply chain business only and has no bearing on the group’s business activities in international express, freight transport and e-commerce logistics solutions in China.

DHL will also continue to receive revenue-based partnership fees for 10 years while providing the co-branded business with a trademark license, customer referral, employee training, best practice sharing and other areas of support.

“This supply chain alliance with SF is a strategic milestone for DPDHL Group,” said Frank Appel, CEO of Deutsche Post DHL Group. “With our joint capabilities we will create a unique platform to meet the need for a high-quality end-to-end supply chain provider in China. SF’s local market expertise combined with DPDHL Group’s global operations standards and network support provide a solid foundation for us to continue exploring further opportunities in China in the coming years. China is on course for sustainable growth, and SF DHL Supply Chain China is well-placed to serve the increasing demands for world-class supply chain services. The agreement, therefore, is the cornerstone for DPDHL Group to gain unprecedented access to China’s immense domestic market.”

Yin Zou, former CEO of Greater China at DHL Supply Chain, has been appointed as CEO of SF DHL Supply Chain China and will continue to lead the business along with his existing management team.

SF DHL Supply Chain China is headquartered in Shanghai and will combine DHL’s supply chain services, management expertise, transportation and warehousing technology with SF’s extensive domestic infrastructure, distribution network and broad base of local customers to drive its growth trajectory.

“SF’s vision is to become a trustworthy logistics-based business partner with comprehensive solutions for our customers, and our partnership with DPDHL, the leading logistics company in the world, helps us move solidly ahead with this vision,” said Dick Wong, chairman of SF Holding. “We are expanding our domestic footprint through SF DHL Supply Chain China to cater to our customers across a multitude of industries. This deal with DPDHL Group, a world-class organization, also helps us to better serve multi-national clients.”

SF DHL Supply Chain China will have access to DPDHL Group’s global expertise, network, operations standards and innovations, across industries such as technology, healthcare, retail, automotive and e-commerce. SF DHL Supply Chain China will leverage SF’s market position in China and plans to expand the service portfolio to SF’s customers while winning new customers with its enhanced product and service offerings.

“This landmark deal gives SF DHL Supply Chain China unparalleled advantage to transform the supply chain industry in China,” said Zou. “My team and I are looking forward to amalgamating the best of what DPDHL Group and SF stand for, and converting these into tangible value for existing and new customers. The strong commitment from DPDHL Group and SF has led to the swift and smooth completion of the transaction, and it is full steam ahead for us to deliver top-quality turnkey supply chain solutions to enterprises in China.”