E-commerce solutions firm eCargo Holdings (ECG) has completed the acquisition of an 85% stake in Australia-based Metcash’s China business.

The transaction involves Metcash Export Services, including its subsidiary Metcash Asia China.

The company wholesales and distributes products to supermarkets and retail groups in China. It also operates cross-border eCommerce stores on platforms such as Tmall Global and JD Worldwide.

Announced in November last year, total consideration of the transaction is A$2.5m ($1.79m) along with 85% of the net asset value of the business of A$5.8m ($4.15m) and deferred compensation of up to A$3.5m ($2.5m).

The compensation has been funded by a combination of ECG’s existing cash reserves and available facility.

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By GlobalData

The combined businesses will offer eCommerce operations and content generation services, online incubation platforms for small and emerging brands, B2C multi-platform, multi-brand eCommerce hub for established brands, B2B wholesale distributor in one and four tier cities, as well as Alibaba Tmall stores of Jessica’s Suitcase and Metcash.

It also allows ECG to create a unified platform enabling companies to sell their products on Chinese virtual, and bricks and mortar shelves.

ECG executive chairman John Lau said: “The completion of this transaction with Metcash demonstrates that we are serious about becoming the leader of consumer products export into China and especially into its regional cities.

“We are serious about becoming the leader of consumer products export into China and especially into its regional cities.”

“Having the supply power of Metcash completes the missing piece of the puzzle for ECG where good products at a good price is complemented by good logistics and sales and marketing into the right channels.”

Metcash China operations head Will Zhao will be appointed as the CEO of ECG, and Metcash China export development head Hai Yun Chen as ECG chief product officer in Sydney.

As part of the transaction, ECG will also merge Metcash’s Australian-based export team with its Sydney-based team, and Metcash Shanghai-based team with ECG and Jessica’s Suitcase teams in China.

This integration will create a team of more than 50 employees in mainland China, which will work from ECG’s corporate headquarters in Hong Kong to help Australian and international brands reach Chinese consumers.