Dairy Farm International, the Asian retail arm of Jardine Matheson, has agreed to pay US$925 million for a minority stake in a regional Chinese hypermarket chain, the Financial Times reported Tuesday.
The sector has proved difficult for foreign retailers but the conglomerate, which to date has had limited interests in China apart from a few property developments, is widening its focus beyond its Southeast Asia and Hong Kong strongholds.
The 20 per cent stake in Yonghui Superstores is the biggest single acquisition by value by the Jardine Matheson group for at least a decade, according to Dealogic data.
The Singapore-listed conglomerate has interests ranging from control of Astra, Indonesia’s largest listed company, to being the biggest landlord in Hong Kong’s prime business district.
“Dairy Farm has for some time been looking for opportunities to participate in the large and high growth Chinese market,” Graham Allan, chief executive of Dairy Farm, said in a statement. “This strategic partnership with Yonghui provides an attractive way to do that.”
Dairy Farm operates Asian supermarket chains such as Wellcome and the health and beauty chain Mannings.
Yonghui’s strongest presence is in inland China where consumption is growing more rapidly than in highly saturated coastal areas, analysts said.
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