Jardines and CK Hutchison pursue Hong Kong supermarket megadeal - FT中文网
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Jardines and CK Hutchison pursue Hong Kong supermarket megadeal

Merger of ParknShop with Wellcome would create a dominant player in the territory’s food retail market
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{"text":[[{"start":10.15,"text":"Two of the biggest names in Hong Kong business are in talks over a supermarket deal that could lead to a single dominant player in the city’s grocery market."}],[{"start":19.55,"text":"Jardines is in negotiations with Li Ka-shing’s CK Hutchison to acquire its supermarket division — which trades as ParknShop — and merge it with Wellcome, according to four people familiar with the matter."}],[{"start":31.55,"text":"A deal, involving the top two food retailers in the territory, would be the equivalent of Tesco buying Sainsbury’s in the UK or Walmart merging with Costco."}],[{"start":42.3,"text":"It would mark a rare direct deal between two historic Hong Kong conglomerates that have competed in the retail market for decades."}],[{"start":49.8,"text":"CK’s AS Watson group, which owns ParknShop, competes against Jardines’ Dairy Farm International, now known as DFI Retail, which runs Wellcome."}],[{"start":59.55,"text":"Talks have been going on for some time but a deal is not imminent, said the people, who declined to comment on valuation."}],[{"start":66.95,"text":"AS Watson and DFI Retail together controlled almost 90 per cent of the Hong Kong supermarket category in 2023, according to the US Foreign Agricultural Service, citing data from Euromonitor."}],[{"start":80.8,"text":"However, there is growing competition from ecommerce and from Hong Kong shoppers crossing the border to buy at lower prices in mainland China."}],[{"start":89.55,"text":"One person involved said that, according to an internal assessment, the market share of the combined group would be less than 50 per cent."}],[{"start":97.2,"text":"CK Hutchison is exploring an initial public offering of AS Watson, which owns chains including Superdrug and The Perfume Shop in the UK, and is seeking a potential valuation of as much as $30bn."}],[{"start":110.35000000000001,"text":"As part of that process, it is contacting potential trade buyers for some of its individual chains, including Fortress electronics stores and Watsons Wine in Hong Kong, according to a person with knowledge of the matter."}],[{"start":123.25000000000001,"text":"CK Hutchison last looked at selling ParknShop over a decade ago, engaging Goldman Sachs and Bank of America, but announced it had dropped the plan in 2013 after it concluded a private sale “would not deliver maximum value to the shareholders of the company”."}],[{"start":139.35000000000002,"text":"Bids for the retailer were in the $3bn-$4bn range at that time."}],[{"start":144.20000000000002,"text":"The deal comes as Jardines moves away from being a business operator to a model closer to that of a private equity group."}],[{"start":151.15,"text":"Last year it announced that Lincoln Pan, formerly co-head of private equity at PAG, would take over as chief executive. The deal, if concluded, would be one of his first big moves."}],[{"start":162.45000000000002,"text":"The move would also mark a continuation of CK Hutchison’s asset rotation as it builds its cash pile, following the sale of UK Power Networks, the planned sale of its non-Chinese ports and mooted IPOs of AS Watson and its global telecommunications business."}],[{"start":179.3,"text":"Spokespeople for DFI and Jardines said the group does not comment “on rumour or speculation”. CK Hutchison did not respond to a request for comment."}],[{"start":189.15,"text":"Additional reporting by William Langley in Guangzhou"}],[{"start":201.25,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776450842_4509.mp3"}

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