Xin Lang Cai Jing·2026-01-20 09:21Core Viewpoint - China Duty Free Group (CDFG) is accelerating its international expansion by acquiring DFS Group's travel retail business in Greater China for up to $395 million, which includes assets and equity stakes in DFS Singapore and DFS Hong Kong [1][2]. Group 1: Acquisition Details - CDFG's wholly-owned subsidiary, CDF International Co., Ltd., signed a framework agreement to acquire DFS's travel retail business, which includes 100% equity of DFS Cotai Limitada and related assets from DFS Hong Kong [1]. - The acquisition will be financed through cash and is expected to close in approximately two months, pending customary closing conditions [2]. - Following the acquisition, CDFG will issue new H-shares to Delphine SAS and Shoppers Holdings HK at a price of HKD 77.21 per share, totaling up to 7,330,100 shares and 4,637,400 shares, respectively [2]. Group 2: Strategic Implications - The transaction aims to enhance CDFG's competitiveness in the overseas travel retail market and is seen as a critical step in its internationalization strategy [2][3]. - CDFG has also signed a strategic cooperation memorandum with LVMH to collaborate in retail areas that align with both parties' strategic interests, focusing on product sales, store openings, brand promotion, cultural exchange, tourism services, and customer experience [2]. Group 3: Market Context - DFS, established in 1960, is a prominent high-end travel retailer with a strong presence in major airports and city centers globally, particularly in Hong Kong and Macau [5]. - In 2024, DFS is projected to achieve revenues of CNY 4.149 billion and a net profit of CNY 128 million, with revenues of CNY 2.754 billion and a net profit of CNY 133 million reported for the first three quarters of 2025 [5]. - The acquisition will enable CDFG to rapidly build a duty-free network in Greater China, complementing its existing channels [5]. Group 4: Market Trends - Since the third quarter of last year, the demand for duty-free shopping in Hainan has rebounded, with a reported shopping amount of CNY 5.02 billion in the first month of the new duty-free policy, marking a 46.8% year-on-year increase [6]. - The number of shoppers in Hainan reached 772,000, reflecting a 29.7% year-on-year growth [6]. - CDFG is exploring new growth avenues as the Hainan market is no longer dominated solely by the company, with city and airport duty-free markets and overseas markets being key areas of focus [6].