China Tourism Group to Acquire DFS’s Greater China Operations
China Tourism Group Duty-Free (CTG Duty-Free) has announced its acquisition of DFS’s travel retail businesses in Hong Kong and Macau, along with intangible assets in Greater China. This significant move marks a pivotal shift in the travel retail market.
Details of the Acquisition
The agreement, unveiled on January 19, was made public by the luxury retail company DFS, which is owned by LVMH, and CTG Duty-Free, based in Beijing. Under the terms, CTG Duty-Free will take over retail stores in Hong Kong and Macau, except for those at City of Dreams. Additionally, the transaction includes various DFS brand names and intellectual properties that will be exclusive to Greater China.
CTG Duty-Free will execute the acquisition through its subsidiary, China Duty Free International Limited. The financial aspects of the deal will be settled in cash. Despite the sale, DFS will maintain its other luxury retail operations worldwide.
New Strategic Collaborations
In a related development, LVMH and the Miller Family plan to subscribe to CTG Duty-Free’s newly issued H-shares in Hong Kong. This participation, while minor compared to the total sale proceeds, highlights both parties’ commitment to a future collaboration. A Memorandum of Understanding has been established between CTG Duty-Free and LVMH to explore strategic partnerships in retail, aiming to maximize their combined strengths in Greater China.
Statements from Key Executives
Luke Chang, Executive Director and President of CTG Duty-Free, stated that this acquisition will enhance their service network in the Greater Bay Area. He emphasized CTG Duty-Free’s mission to promote Chinese brands globally and to contribute to the retail economy of Hong Kong and Macau.
DFS Chairman and CEO Ed Brennan noted that the sale marks a significant milestone for DFS, recognizing the company’s legacy in Hong Kong and Macau. He expressed confidence in the future of the DFS shopping experience under CTG Duty-Free’s management.
Michael Schriver, President of LVMH North Asia, emphasized the importance of the partnership with CTG Duty-Free for the future operation of DFS in these regions. He underscored the expertise and track record of CTG Duty-Free in the travel retail sector.
Looking Ahead
The conclusion of this transaction is pending standard closing conditions, with expectations to finalize in approximately two months. China Galaxy International is serving as the financial advisor for CTG Duty-Free, while legal advisors include King & Wood Mallesons for CTG and Freshfields for DFS and LVMH.
This acquisition not only reinforces CTG Duty-Free’s dominance in Greater China but also reshapes the global travel retail landscape. The transition signifies an important evolution for both DF’s legacy and CTG Duty-Free’s strategic ambitions in the region.
