LONDON — China Tourism Group Duty Free, the nation’s biggest travel retail operator with more than 80 percent of the domestic market share, on Monday said it has agreed to buy DFS’s travel retail business in Greater China in cash from its current owners LVMH Moët Hennessy Louis Vuitton and its cofounder, Robert Miller.
According to the agreement — through its wholly owned subsidiary China Duty Free International Ltd. — CTG Duty-Free will gain control of DFS retail stores in Hong Kong and Macao — excluding the City of Dreams store in Macao — and intangible assets of a series of DFS brands and intellectual properties for exclusive use in Greater China.
The deal is expected to be completed in the next two months, subject to customary closing conditions.
As part of the move, LVMH and the Miller family will participate in a capital increase of CTG DutyFree by subscribing to newly issued H-shares listed in Hong Kong. The subscription amount represents a small part of their proceeds, and the subscription will be made upon completion of the transaction.
DFS will continue to operate its other luxury travel retail operations worldwide following the transaction.
CTG Duty-Free and LVMH also entered into a memorandum of understanding under which both parties aim to set up a strategic cooperation, notably in the retail sector, where the strategies of both parties are aligned and in line with the current business model of the LVMH brands.
This cooperation will offer CTG Duty-Free, which operates nearly 200 duty-free stores across more than 100 cities worldwide, and LVMH opportunities to leverage their respective strengths and forge further collaboration in Greater China.
For example, DFS Yalong Bay, the largest project ever conceived by DFS, situated in the tropical city of Sanya at the southern tip of China’s duty-free island Hainan, is set to be unveiled in phases from later this year.
Stretching more…