Swiss duty-free retailer Dufry announced on 5th October it has entered into a joint venture with China’s Alibaba Group to partner in the Chinese travel retail market and boost its digital technologies.
The joint venture between both parties will be 51% owned by Alibaba Group and 49% by Dufry. The Chinese e-commerce giant will offer its established network in China and its digital capabilities to the travel retailer, while Dufry will contribute its existing travel retail business in China.
Dufry said it would also support the JV with its supply chain and strong operational skills, according to a press release.
In addition to the collaboration, “Alibaba will invest in Dufry up to a maximum of 9.99% of the post-offering share capital and will participate in its ordinary capital increase, which is subject to approval of Dufry’s shareholders at its upcoming EGM on 6th October 2020,” said the company said.
Last month, Dufry secured a commitment from funds managed by Advent International Corporation to purchase shares at US$31.15 per share up to a maximum investment amount of US$453.6 million. With the additional commitment by Alibaba, Dufry has proposed the issuance of up to US$27.3 million fully paid-in registered shares, which would result in capital-raising of approximately US$765.111 million.
The proceeds will be used to finance the previously announced acquisition of all remaining equity interest in Hudson Ltd, which Dufry acquired in full in August, and for general corporate purposes, including the JV setup and operations with Alibaba.
Dufry said it expects the JV partnership to drive company growth in Asia and attract more Chinese customers globally, thanks to Alibaba’s digital capabilities.
“Alibaba Group is a leader in digital commerce with an ecosystem of more than 800 million consumers in China,” said Julian Diaz, Dufry Group CEO.
“By fostering existing and new business models in offline and online travel retail, we are convinced the joint venture will capitalize on growth opportunities and will support
Dufry to become the leading digital travel retail company worldwide,” continued Julian.
Dufry operates across 65 countries with over 2,500 shops globally.