Dairy Farm cleared to buy Yonghui stake
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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.
Questions & Answers
Q.Which regulatory body gave the final approval for Dairy Farm's acquisition?
Which regulatory body gave the final approval for Dairy Farm's acquisition?
The China Securities Regulatory Commission gave the final and unconditional approval for Dairy Farm International to acquire its stake in Yonghui Superstores.
Q.What is the value of the deal for Dairy Farm's stake in Yonghui?
What is the value of the deal for Dairy Farm's stake in Yonghui?
The deal for Dairy Farm's 19.99 per cent stake in Yonghui Superstores is valued at RMB5.69 billion, which is equivalent to US$908 million.
Q.How many stores did Yonghui operate across China at the end of 2013?
How many stores did Yonghui operate across China at the end of 2013?
As at the end of 2013, Yonghui had 288 hypermarkets and supermarkets operating across 17 provinces in China.
Q.What areas of collaboration are planned between Dairy Farm and Yonghui?
What areas of collaboration are planned between Dairy Farm and Yonghui?
Dairy Farm and Yonghui plan to collaborate in procurement, fresh food processing, and store development as part of their strategic partnership.
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