Hong Kong – DFS, the global luxury travel retailer owned by LVMH and Robert Miller, has signed a definitive agreement with China Tourism Group Duty Free (CTG Duty Free) to sell its travel retail operations in Hong Kong and Macau, along with associated intangible assets in Greater China.
Under the agreement, CTG Duty Free will acquire DFS’ retail stores in Hong Kong and Macau, as well as selected DFS brands and intellectual property for exclusive use in Greater China. The acquisition will be carried out through CTG Duty Free’s wholly owned subsidiary, China Duty Free International Limited, with the transaction to be settled in cash.
Following completion, DFS will continue to operate its luxury travel retail business in other markets worldwide.
Separately, LVMH and the Miller family will participate in a capital increase of CTG Duty Free by subscribing to newly issued H-shares listed in Hong Kong, using a portion of the proceeds from the transaction. The subscription will be completed upon closing.
Luke Chang, executive director and president of CTG Duty-Free, said, “This move will further expand CTG Duty-Free’s service network across the Greater Bay Area, aiming to build a platform for promoting China-chic brands globally and establish an international business mid-platform.”
“CTG Duty-Free remains committed to providing high-quality travel retail experiences to both domestic and international tourists, fulfilling its responsibility as a central state-owned enterprise-controlled listed company to support the high-quality development of the retail economy in Hong Kong and Macau. Executed under the leadership of its parent company, China Tourism Group, this represents a significant step in accelerating CTG Duty-Free’s international business layout and actively implementing the Greater Bay Area Strategy and the “China-chic Brands Going Global” Strategy,” he added.
CTG Duty Free and LVMH have also entered into a memorandum of understanding to explore strategic cooperation in the retail sector, including potential collaboration across product sales, store development, brand promotion, travel services, and customer experience in Greater China.
Ed Brennan, chairman and CEO of DFS, commented, “The sale of our Hong Kong and Macau stores marks an important step for DFS. DFS’ well-established presence and operational excellence in Hong Kong and Macau is an achievement we take great pride in. The DFS shopping experience will be carried forward and enhanced by the new skills and perspectives that CTG Duty-Free will bring. We are proud of our journey in this region and grateful to everyone who has been a part of it.”
Michael Schriver, president of LVMH for North Asia, continued, “For decades, DFS has played a pivotal role in shaping Hong Kong and Macau into premier destinations for travel retail. As we look to the future, we consider China Tourism Group Duty Free to be the ideal partner to operate the DFS business in Hong Kong and Macau and to lead it into its next chapter, thanks to their expertise and proven track record in travel retail. This whole operation underscores our confidence in the long-term potential of the Chinese market.”
The transaction is subject to customary closing conditions and is expected to be completed within approximately two months.
China Galaxy International is acting as sole financial adviser to CTG Duty Free, with King & Wood Mallesons serving as its legal adviser. Freshfields is advising DFS and LVMH.
