Continuing its acquisition spree, Chinese conglomerate HNA Group is picking up a 16.8 per cent stake in Swiss duty-free stores operator Dufry AG, which is listed on the SIX Swiss Exchange, at a market value of about 1.44 billion Swiss francs ($1.44 billion).
This exceeds the 15 per cent threshold, due to an agreement with third parties to purchase shares in Dufry.
An exchange filing indicates HNA purchased the stakes at market-based prices, based on a “low double-digit premium”. Currently, Dufry posts a market capitalisation of 8.74 billion Swiss francs ($8.79 billion). Its shares surged in value, reaching 162.80 Swiss francs at market close on Tuesday.
Founded in 2000, HNA is involved in the aviation, real estate, financial services, tourism, logistics, and other industries and is listed among the Fortune Global 500. The Hainan Traffic Administration Holding (70%) and Jianyun Investments (30%) are its main shareholders.
According to the Wall Street Journal, it had approached existing shareholders, including Singapore’s sovereign wealth fund GIC and state investment firm Temasek Holdings, to purchase stakes from them.
GIC, Temasek and Qatar Investment Authority (QIA) each committed up to 450 million Swiss francs to help fund Dufry’s acquisition of Italy’s World Duty Free in 2015. According to its 2016 financial report, Temasek Holdings owns 8.6 per cent of Dufry, GIC owns 7.8 per cent and QIA holds 6.9 per cent of the firm.
The acquisition of a stake in Dufry grants it access to the largest travel retail operator’s network in the world, which has 2,200 shops at airports, sea hubs and tourist locations from Las Vegas to Milan.
The conglomerate has been fueling its growth in recent quarters with a highly acquisitive strategy. 2016 saw it acquire a 25 per cent stake in Hilton Worldwide for $6.5 billion; $10 billion for the aircraft-leasing division of financial firm CIT Group; and the $6 billion acquisition of Ingram Micro. Most acquisitions are complementary to its core competencies.