Abu Dhabi, UAESunday 20 September 2020

Investcorp and China Resources take majority stake in Hong Kong food retailer

City Super Group's management will remain in place to oversee regional expansion of the business following the deal

Bahrain-based asset manager Investcorp has $32.2bn of assets under management as of June 30. Courtesy Investcorp
Bahrain-based asset manager Investcorp has $32.2bn of assets under management as of June 30. Courtesy Investcorp

Bahrain-based Investcorp and China Resources Capital Management acquired a majority stake in Hong Kong-based food retail business City Super Group.

The deal, for an undisclosed sum, will see existing shareholders Fenix Group and the Lane Crawford Joyce Group retain a minority 35 per cent interest in the company, which will continue to be run by its current management.

The deal is subject to merger control approval from Chinese authorities, as the company has seven stores in Shanghai. It also has 20 Hong Kong stores and seven in Taiwan, according to its website. The transaction is expected to be completed by the end of the year.

"As one of the most preeminent food retail and lifestyle brands in Asia, we believe that City Super Group is well-positioned for growth," Hazem Ben-Gacem, co-chief executive of Investcorp said in a statement on Tuesday.

"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.”

Investcorp, which has Abu Dhabi's Mubadala Investment Company as its biggest shareholder, launched a $500 million (Dh1.8 billion) fund to invest in Asian food brands in November last year, alongside China Resources and Fung Strategic Holdings. An initial $275m funding round closed in April.

The company, which has $32.2bn worth of assets under management as of June 30, is also an investor in a number of food and retail businesses including Saudi Arabian supermarket group BinDawood Holding, which recently announced its intention to float on the kingdom's stock market.

City Super Group was founded in 1996 and operates food supermarkets under the city'super brand and largely non-food lifestyle stores under the Log-On brand. Following the investment, the company plans to expand its business to capitalise on consumer growth and premiumisation trends in the region, the statement said.

"We trust that our new partners will help consolidate our success and accelerate our growth in Greater China and the Asia markets, and help us adapt to a rapidly changing marketplace,” said City Super Group's chief executive, Thomas Woo.

Updated: September 8, 2020 01:11 PM

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