By
Reuters
Published
Oct 29, 2009
Reading time
2 minutes
Download
Download the article
Print
Text size

China Resources says to buy hypermarket chain, brewery

By
Reuters
Published
Oct 29, 2009

HONG KONG, Oct 29 (Reuters) - China Resources Enterprise Holdings (0291.HK) said it aims to focus on the rapidly growing consumer market on the mainland through an asset swap with a major shareholder, in a deal valued at nearly HK$5 billion ($645 million).


Esprit, China Resources Enterprise Holding has a 51% in the brand

"The proposed group reorganisation represents a further step in the company's strategy to be a market leader in its core consumer business, namely retail, beverage, food processing and distribution," executive director Lai Nihium said in a statement.

As part of the deal, the conglomerate will transfer its interest in a textile division and 10 percent interest in each of the two container terminal operations in Hong Kong and China's Yantian, valued at HK$4.78 billion, to its major shareholder China Resources (Holdings) Co Ltd, in exchange for a hypermarket chain and a brewery in Shandong, valuing HK$4.94 billion.

The conglomerate will pay another HK$30 million in cash to settle the deal.

Lai said the hypermarket chain, which has 75 stores operating in northern and central China, is expected to break even this year and may contribute to profit in the years ahead.

The major shareholder will also transfer a brewery to the company's brewery unit China Resources Snow Breweries Ltd in a move to expand the distribution network and production capacity in Shandong province.

Lai also said the company was in talks with various potential buyers for its stake in a joint venture with Esprit (0330.HK) but he declined to elaborate.

Last week, China Resources said it would speed up sales of assets, including a textiles business, a 51 percent stake in an Esprit China joint venture and a stake in Hongkong International Terminals (HIT) -- and buy a mainland hypermaket chain as it transforms into a pure Greater China consumer play.

Shares of the conglomerate have risen 45 percent in the third quarter, outperforming a 14 percent rise in the broader market .HSI during the period. Trading in the stock, which was suspended on Thursday 29 October, will resume trade on Friday 30 October. (US$1=HK$7.75) (Reporting by Donny Kwok; Editing by Jacqueline Wong)

© Thomson Reuters 2024 All rights reserved.