Logistics companies SF Holding and J&T Express have agreed to invest in each other as part of a strategic cross-shareholding agreement that will see SF Holding becoming the second largest single shareholder of its rival.

The deal will see both companies issuing new shares to each other.

J&T Express will issue 822 million class B shares to SF Holding at HK$10.10 each - 14 percent lower than Wednesday's closing price.

Simultaneously, SF Holding will issue 226 million H shares to J&T Express at HK$36.74 per share - a premium of 4 percent from the previous close.

Upon completion, SF Holding will hold 10 percent of J&T Express, which will also own a 4.29 percent stake in SF Holding.

In separate filings to the Hong Kong stock exchange, J&T Express founder Jet Lee and SF Holding founder Wang Wei both said the deal is of significant strategic importance to them, to expand service boundaries and enhance competitiveness in global logistics markets.