CHINA. Gree Real Estate has completed the acquisition of sister company Zhuhai Duty Free Enterprise Group in a CNY12.2 billion (US$1.8 billion) deal.
The deal, first revealed in May, adds further momentum to China’s fast-reviving travel retail sector.
Gree Real Estate’s majority shareholder is the State-owned Assets Supervision and Administration Commission (SASAC) of the Zhuhai Municipal People’s Government. Zhuhai Duty Free Enterprise Group is that body’s property developing arm (77% controlled).
Zhuhai Duty Free’s flagship store is located at Gongbei, the entry point between Zhuhai and Macau, with pre-COVID-19 annual turnover of around US$300 million from a passenger base of over 130 million a year. Its most recent project was the opening of a departures shop in the Zhuhai to Hong Kong waiting hall of the Hong Kong-Zhuhai-Macao Bridge, which was inaugurated in October 2018. A further phase of that project is planned.
Zhuhai Duty Free also runs duty free businesses in Gongbei, Hengqin and Jiuzhou ports; Tianjin Binhai International Airport (arrivals shop, 51% controlled); and several other locations with more in the pipeline.
According to respected Shanghai-based media title Yicai Global, Zhuhai, Guangdong province-based Gree will pay 6.55 percent of the price in cash and the rest through the issuance of new stocks.
The report said that Zhuhai Duty Free posted revenues of CNY2.1 billion (US$314 million) in 2019, generating net profits of CNY690 million (US$103 million).
Zhuhai Duty Free Enterprises has been steadily integrating its offline and online retail models in recent times, leveraging the expertise of wholly-owned subsidiary Zhuhai Huizhen Business Co. In 2019, it launched the Duty Free Goods+ app, described as a comprehensive ecommerce platform.
