Swiss duty-free retail giant Dufry AG and Alibaba Group agreed to set up a joint venture in which the Chinese online marketplace will acquire up to a 9.9 percent stake in Dufry and together develop a travel retail business in China.
Alibaba will hold a 51 percent majority stake in the joint venture, with Dufry holding a 49 percent minority stake. The JV will see Alibaba contribute its established network in China and its digital capabilities. Dufry will contribute its existing travel retail business in China and support the JV with its supply chain and operational skills.
“We expect this collaboration to drive growth in Asia and with Chinese customers worldwide with the support of new digital technologies. Alibaba Group is a leader in digital commerce with an ecosystem of more than 800 million consumers in China. Dufry holds a leading position in travel retail globally and brings in its strong operational expertise in 65 countries and over 2,500 shops,” 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.”
“The partnership with Alibaba Group is in line with Dufry’s growth strategy focusing on the Asian markets and builds on the company’s existing and long-dated footprint in China. Dufry first started to operate travel retail businesses in China in 2008. Today, Dufry manages duty-paid shops in the Shanghai and Chengdu Airports, and its presence extends to Hong Kong and Macau,” Dufry said.
As the world’s largest operator of duty-free shops in airports across Europe and North America, Dufry has been struggling due to the coronavirus pandemic. It is currently in the middle of a capital raise of 700 million Swiss francs ($764.1 million). Alibaba’s planned stake would represent an investment of up to 250 million Swiss francs ($272.9 million). The investment stake is subject to the approval of Dufry’s shareholders at the company’s general meeting on Tuesday.
Dufry said Alibaba will join Advent International, a private equity firm, in its capital raise. Advent said it would purchase shares valued at up to 455 million Swiss francs ($496.7 million), which also requires the approval of shareholders.
The Swiss firm said in August that it plans to acquire the 42 percent stake in U.S. travel retailer Hudson that it didn’t already own, a deal valued at about $310 million. The capital raise would help to finance the Hudson deal and for general corporate purposes.