HONG KONG. Hutchison Whampoa, through its retail arm A.S. Watson – partner in Hong Kong International Airport retailer Nuance-Watson (HK) – is set for a global spending spree, according to an interview with A.S. Watson Managing Director Ian Wade in today’s South China Morning Post.
As anticipated, the company last Friday offered €534 million in cash for Marionnaud, France’s biggest fragrances and cosmetics chain, in an agreed takeover. The deal is expected to be completed this quarter. Completion of the transaction will bring A.S. Watson’s health and beauty store number to over 5,662, making it the world’s largest retail company in the sector.
Marionnaud has 1,226 stores operating in France and 14 other countries. A.S. Watson Group is not currently present in France, nor in most of the other key markets of Marionnaud including Italy, Spain, and Austria. “Marionnaud therefore appears as a natural fit for the Group’s continuing expansion strategy in Europe,” said A.S. Watson, which added that expansion of the perfumery sector was a strategic goal.
“A.S. Watson’s main aim for the offer is to revitalise Marionnaud by leveraging its brands and its retail network and by integrating Marionnaud into its international portfolio,” it said.
Following up on the bid, Wade told The South China Morning Post: “If the deal pushes through [in March], the retail division will account for 50%, from a previous 46%, of Hutchison Whampoa’s total turnover.
“We believe we can conquer the world of health and beauty in five years,” he added, saying that there was no budget limit for its continued acquisition programme as long as synergies were created with Hutchison’s existing retail portfolio. A small but high profile part of that portfolio is Nuance-Watson (HK). While Wade did not say whether the company would extend its presence in the travel retail sector, it clearly has the cash to do so.
“Another four new projects will be announced in the next two months,” he told the newspaper.
He said the four include operations in two Asian countries not already served by Watson. This will add two more chains in Europe. Watson is also eyeing markets in Ireland, Greece, Russia, South America and India.
Wade said Watson’s capital expenditure would reach US$4 billion this year.
MORE ON THE MARIONNAUD ACQUISITION
