China's HNA buys 16.8% stake in Swiss firm Dufry

Temasek owns 8.6 per cent of Dufry and GIC 7.8 per cent. A report last month said HNA had approached existing shareholders, including Temasek and GIC, for the stakes.
Temasek owns 8.6 per cent of Dufry and GIC 7.8 per cent. A report last month said HNA had approached existing shareholders, including Temasek and GIC, for the stakes.PHOTO: REUTERS

ZURICH • Chinese conglomerate HNA Group has agreed to purchase 16.8 per cent of Swiss duty-free stores operator Dufry, a stake with a market value of about 1.44 billion Swiss francs (S$2.02 billion).

The group announced it has exceeded the threshold of 15 per cent due to an agreement with third parties to purchase the shares of Dufry.

HNA, which has business interests spanning from the aircraft to the hotel management industry, had earlier approached existing shareholders, including Singapore wealth fund GIC and investment firm Temasek Holdings, for the stakes, the Wall Street Journal had reported last month.

Yesterday, according to an exchange filing, HNA purchased the stakes at a price based on market conditions, which was a "low double-digit premium", it was reported.

HNA's stake would give it access to the world's largest travel retail operator's network with 2,200 shops at airports, sea hubs and tourist locations from Las Vegas to Milan.

HNA, led by billionaire Chen Feng, grew out of Hainan Airlines and has diversified into insurance, ship repairs and logistics. It operates over 2,000 hotels globally and 16 airports in China, and has been acquiring travel-related businesses as rising incomes fuel a boom in Chinese tourism. It has spent over US$30 million (S$42 million) in deals over the past year.

"HNA is building a travel and leisure giant, focused on Chinese travellers, and Dufry would fit into that portfolio perfectly," said Mr Jon Cox, head of European consumer equities at Kepler Cheuvreux, according to Bloomberg.

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. Temasek owns 8.6 per cent of Dufry, GIC 7.8 per cent and QIA 6.9 per cent, according to Dufry's annual report. Dufry shares were up 0.5 per cent in early trading in Zurich.

Recent HNA investments include a US$1 billion deal for Singapore-based logistics provider CWT and a 25 per cent stake in hotel operator Hilton Worldwide Holdings.

A version of this article appeared in the print edition of The Straits Times on April 27, 2017, with the headline 'China's HNA buys 16.8% stake in Swiss firm Dufry'. Print Edition | Subscribe