China Resources consortium buys Hong Kong’s City Super

CR Capital is investing alongside Asia Food Growth Fund, a joint venture between CR Capital, Investcorp, and Hong Kong consumer and supply chain conglomerate Fung Group that achieved a first close of $275 million earlier this year on a target of $500 million. Financial details have not been disclosed, although Bloomberg has reported the deal values City Super at around $300 million.

Hong Kong-based retail groups Fenix Group and Lane Crawford Joyce Group will retain a combined 35% position in the company alongside other existing shareholders. The transaction is expected to be completed within the year. City Super will continue to operate independently and maintain its existing management, including CEO and co-founder Thomas Woo.

Founded in 1996, City Super is best known for its eponymous chain of high-end grocery stores and Log-On, a retail chain offering lifestyle and novelty products. It currently has 20 locations in Hong Kong and six locations in Shanghai across these two brands.

The company is expected to benefit from synergies with existing grocery and retail brands under China Resources ownership, including CR Vanguard and Ole. There will be a focus on developing business in the high-end food space.

“We believe China Resources will bring significant resources and expertise, and we are committed to build upon City Super Group’s track record and strengths,” Woo said in a statement. “We trust that our new partners will help consolidate our success and accelerate our growth in China and help us adapt to a rapidly changing marketplace.”

CR Capital is a unit of state-owned conglomerate China Resources with RMB90 billion ($12.9 billion) in assets under management across 19 funds targeting consumer, healthcare, energy, and technology-related sectors. China Resources is known for owning Snow, one of China’s leading beer brands.

The firm teamed up with Investcorp and Fung to create Asia Food Growth Fund last year. The fund will look to exploit the fragmented nature of Asia’s food sector, with a focus on China. The goal is to leverage key trends around the expected emergence of 120 million Chinese middle-class households over the next decade, as well as growing demand among Chinese millennials for premium and healthier brands.

Investcorp has invested more than $1.5 billion globally since 2001 and currently claims $32.2 billion in assets under management. Asia Food Growth Fund is part of the Bahrain-listed firm’s Asian expansion agenda along with a technology-focused partnership with China Everbright.

Consumer brands are a mainstay of many Asia private equity investment strategies, but few managers are solely devoted to the food and beverage space. Hosen Capital is currently in the market looking to raise $750 million for its fourth China food and agriculture fund, which targets the entire food industry supply chain.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Buyouts
• Consumer
• Hong Kong (China)
• China Resources Capital
• Investcorp
• Fung Strategic Holdings