Major pan-Asian retailer Dairy Farm International Holdings has acquired a 19.99% state in Shanghai-listed supermarket Yonghui Superstores for CNY5.69 billion (US$915 million). 

The two entities entered into a conditional agreement for the acquisition in August last year, and the deal received final approval from the China Securities Regulatory Commission (CSRC) in March.

On April 7 Dairy Farm announced the deal had been completed.

Website Asia.nikkei.com reported Yonghui planned to invest the money raised from the acquisition in supply chain infrastructure and technology, and potentially acquisitions.

The story also said Yonghui operated 288 supermarkets and hypermarkets across 17 provinces in mainland China as of December 2013, generating a pre-tax profit that year of CNY1 billion (US$161 million).

It added that according to Dairy Farm, Yonghui's sales had increased 148% over the previous three years.

The company has been listed on the Shanghai Stock Exchange (SSE) since 2010.

"Modern food retail is a growing category in China and underlying consumer trends will sustain that growth for many years," Dairy Farm CEO Graham Allan said in a statement last August.

"This strategic partnership with Yonghui provides an attractive way to participate in the large and high-growth Chinese market."

Dairy Farm operates more than 6,100 outlets, including supermarkets, hypermarkets, convenience stores, health and beauty stores, home furnishing stores and restaurants. It employs more than 100,000 people and its 2014 total sales exceeded US$13 billion.

The retailer is incorporated in Bermuda and has its primary listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore.

Photo: Wikimedia Creative Commons

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