Malaysia’s DFI approves Heinemann sale agreement

Shareholders of Malaysia’s largest duty-free operator Duty Free International Ltd have approved a strategic partnership with Heinemann Asia Pacific for a sale of up to 25% equity interest plus one share in DFZ Capital Berhad (DFZ).

The sale and purchase agreement with Heinemann comprises a 10% equity interest plus one share in DFZ (the proposed sale), and two call options to purchase up to a further 15% equity interest in DFZ.

The proposed sale is targeted to be completed by June 2016. On completion of the proposed sale, Heinemann will be entitled to board representation on the board of directors of DFZ, allowing both parties to deliver the expected synergies in an efficient and timely manner, said DFI in a statement.

“We view Heinemann as a strong business partner and strategic investor. The completion of the proposed sale will bring significant positive changes to DFZ. Going forward, we will be leveraging on their resources and expertise in the areas of purchasing, merchandising, product assortment/costing, retail store management, distribution and logistics management. We believe that this alliance will further enhance the overall travel retail experience in Malaysia, to bring us on par with the best available in the world. The Proposed Sale will also further strengthen DFI’s financial position and allow the Company to consider future business opportunities.” said DFI  executive  director Lee Sze Siang.

Commenting on the proposed sales, Heinemann Asia Pacific CEO Max Heinemann said: “One of the key synergies for this alliance is the similar business models and corporate culture that both the organisations share. We are confident that this partnership will provide a sturdy platform for our expansion into South East Asia.”

DFZ Capital Berhad, a group subsidiary of DFI with an operating history of more than 35 years, is the largest multi-channel duty-free and duty-paid retailing group in Malaysia. The company, through its “ZON” brand of retail shops, serves both Malaysian and international customers across all major entry and exit points in Peninsular Malaysia including operations at international and domestic airports, seaports, border towns, duty-free islands and other tourist destinations.

The companies entered into the sale and purchase agreement in March 2016 as reported.