CHINA. Shanghai International Airport Company announced on Friday that it will partner with Shanghai Airport Investment Co in a joint venture to acquire 32% of the issued shares in Hong Kong’s Uni-Champion International Limited, a shareholder in the Sunrise Duty Free business. .
The new JV will also acquire a 12.48% stake in CDF Sunrise Internet Technology Co from Tianjin Boyu.
Uni-Champion’s assets include 49% of shares in Sunrise Shanghai, Sunrise China, CDF Beijing and CDFG Daxing (the balance 51% is owned by China Duty Free Group).
After the acquisition, the joint venture will own a 15.68% stake in Sunrise Duty Free (Shanghai) Co Ltd; Sunrise Duty Free (China) Co Ltd; China Duty Free Group Beijing Capital Airport Duty Free Co Ltd; and China Duty Free Group Beijing Daxing International Airport Duty Free Co Ltd.
Those core assets are mainly engaged in Shanghai Hongqiao International Airport, Shanghai Pudong International Airport, Beijing Capital Airport and Beijing Daxing Airport, as well as duty-free operations in Shanghai and Beijing and online bond goods business.
The total investment (including JV formation and acquisitions) is RMB 1.698 billion (US$252.5 million). Shanghai Airport will account for 80% of the capital investment.
Explaining the rationale behind the deal, Shanghai Airport said: “In order to increase the company’s competitive advantage in the non-aviation business sector and actively respond to the development trends of the domestic duty-free sector, the company decided to sign an agreement. investment company and set up a JV and its Hong Kong subsidiary. We will use the Hong Kong subsidiary to acquire 32.0% of the issued shares of Uni-Champion owned by Phoenix Dawn.
“After the completion of this transaction, Shanghai Airport will further utilize the synergistic effect with the core assets of the target company, create a distinctive brand of Shanghai Airport through duty-free and online bond import sales arrangement, and carry out further development. “Airport + Duty Free”.
“The purchase price is low and the great opportunity has been seized at the right time,” Hangzhou-based Zheshang Securities Co said in the deal.
“Airport + Duty Free” cooperation greatly increases the ability to withstand risks… Shanghai Airport has become an owner + operator.
“In the past, the market concerns about the so-called sabotage [of its offline duty free business] online from direct mail and downtown duty free is greatly mitigated. To some extent, this solves the risk that Shanghai Airport’s business is too concentrated in offline airport duty-free shops.” ✈