Dairy Farm International Holdings is taking a minority stake in Shanghai-listed hypermarket and supermarket operator Yonghui Superstores.
Pan-Asian retailer Dairy Farm will pay 5.69 billion yuan (approximately $925 million) to acquire a 20 per cent stake in Yonghui, with 288 hypermarkets and supermarkets across 17 Chinese provinces.
Dairy Farm, which operates 5800 outlets comprising supermarkets, hypermarkets, convenience stores, health and beauty stores, home furnishings stores and restaurants, says the acquisition is aimed at taking a larger share of China’s modern food retailing sector.
“As a leading Asian retailer, Dairy Farm has for some time been looking for opportunities to participate in the large and high growth Chinese market. This strategic partnership with Yonghui provides an attractive way to do that,” Dairy Farm Group CEO Graham Allan.
The acquisition comes at a time when FMCG retailers are consolidating amidst slowing economy and tougher competition.