The Dairy Farm Company (DFCL) has agreed to acquire a 19.99% interest in Yonghui Superstores Co., Ltd (Yonghui) by way of subscription of new shares for a consideration of RMB5.69 billion (approximately US$925 million).
Yonghui is a Shanghai-listed hypermarket and supermarket operator based in Fuzhou, Fujian province in China.
As at 31st December 2013, it operated 288 hypermarkets and supermarkets across 17 provinces, with more than 60% in Fujian and Chongqing, and the majority of the remainder in Beijing, Anhui, Jiangsu and Henan provinces.
The investment requires the approval of Yonghui’s shareholders and the obtaining of certain regulatory approvals in China.
The regulatory approval process is expected to take at least six months to complete.
DFCL has also entered into a business co-operation agreement with Yonghui, which comes into effect immediately.
Under this agreement, the two groups aim to collaborate in a range of areas, such as procurement, private label product development, fresh food processing and store development.
