Food
Dairy Farm International has been given regulatory clearance to acquire its target 19.99 per cent stake in Shanghai-listed Yonghui Superstores.
The deal, announced last August, was conditional on regulatory approvals. Dairy Farm has now confirmed it has received the final and unconditional approval of the China Securities Regulatory Commission, which was the final clearance required.
The deal, worth RMB5.69 billion (US$908 million), will see the Hong Kong based retail giant take a cornerstone stake in one of China’s fifth largest hypermarket operator. Yonghui had 288 hypermarkets and supermarkets across 17 provinces in China as at the end of 2013.
Dairy Farm has more than 6100 supermarkets, health and beauty stores, home furnishings shops and restaurants across Asia on its own or in joint ventures. It will collaborate with Yonghui in procurement, fresh food processing and store development.
“Dairy Farm has for some time been looking for opportunities to participate in the large and high growth Chinese market,” Graham Allan, CEO of Dairy Farm, said in a statement at the time the deal was announced.
“This strategic partnership with Yonghui provides an attractive way to do that.”
With clearances now in hand, completion of the purchase is now expected to take place in April.
