Investcorp, China Resources to acquire majority stake in Hong Kong's high-end retailer

The Bahraini alternative-assets manager aims to capitalize on Greater China and Asia's consumption growth and premiumization trends

  
Traders walk out of Bahrain Bourse in Manama, Bahrain, September 16, 2019.

Traders walk out of Bahrain Bourse in Manama, Bahrain, September 16, 2019.

REUTERS/ Hamad I Mohammed

Bahrain-based Investcorp and China Resources Capital Management Limited (CR Capital Management) will acquire a majority stake in City Super Group, a Hong Kong-based high-end supermarket chain.

CR Capital Management is the alternative investments arm of China’s state-owned conglomerate, China Resources Holdings. The transaction is expected to be completed by the fourth quarter of this year, subject to Chinese regulatory approvals.

Last week, Bloomberg reported that CR Capital Management is close to buying a majority stake in City Super Group, valuing the high-end Hong Kong supermarket chain at almost $300 million. CR Capital Management and its co-investors plan to acquire 65 percent of City Super Group from owners led by The Fenix Group, the report said.

According to Investcorp, the new partnership will enable the group to accelerate its expansion plans and to continue to seek to best capitalize on Greater China and Asia’s consumption growth and premiumization trends.

All shareholders will collaborate together with City Super Group’s management team and its staff to implement City Super’s vision, Investcorp said in a statement.

Hazem Ben-Gacem, Co-CEO of Investcorp, said: "As one of the most preeminent food retail and lifestyle brands in Asia, we believe that City Super Group is well-positioned for growth. We have a long history of investing in food brands and supermarket chains globally at Investcorp, and we look forward to working with our world-class partners to support City Super Group’s continued expansion."

UAE's Mubadala Investment Company is Investcorp's biggest shareholder. In April, Investcorp announced the $275 million first closing of its Asia Food Brands private equity joint venture platform established alongside CR Capital.

The COVID-19 crisis impacted Investcorp's profitability as fee income contracted to $ 288 million for FY2020, a decline of 23 percent compared to $376 million for FY19.

The Bahraini alternative-assets manager has $32.2 billion worth of assets under management. “While the short-term economic outlook remains uncertain due to the ongoing pandemic, we are committed to advancing our growth strategy and reaching $50 billion in AUM over the medium term," according to Investcorp's Executive Chairman Mohammed Alardhi.

City Super Group, founded in 1996, has 20 stores in Hong Kong, seven in Shanghai and seven in Taiwan across its three brands, according to its website.

(Reporting by Seban Scaria; editing by Daniel Luiz)

seban.scaria@refinitiv.com

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