CTG Duty Free to buy DFS’s Greater China travel retail biz from LVMH for US$400m

China Tourism Group Duty Free (1880) said it has agreed to buy DFS’s Greater China travel retail business from French luxury group LVMH and its co-founder for US$395 million (HK$3.08 billion). 

The Chinese tourism retailer plans to acquire DFS’s travel retail stores in Hong Kong and Macau as well as intangible assets encompassing the DFS brand for exclusive use in Greater China, according to a filing on Tuesday.

DFS, a subsidiary of LVMH, was co-founded by American-British billionaire Robert Warren Miller in Hong Kong in 1960. 

Upon completion of the acquisitions, subsidiaries of LVMH and Miller’s family will acquire 7.33 million and 4.64 million shares, respectively, in CTG Duty Free for a total of HK$924 million. 

Each share is priced at HK$77.21, a 11.66 percent discount to the closing price on Monday.

Following the share sale, the two buyers would collectively hold a stake of 0.57 percent in the Chinese firm. 

CTG Duty Free has also entered into a memorandum of understanding with LVMH, aiming to set up a strategic cooperation in the retail sector. 

This cooperation will offer both parties opportunities to leverage their respective strengths and forge further collaborations in Greater China to achieve mutual benefits, including in the areas of product sales, store establishment, brand promotion, cultural communication, travel services or customer experience, the filing said. 

Shares of CTG Duty Free jumped 5.7 percent on the announcement, against the weak performance of the benchmark Hang Seng Index.