Heinemann to buy up to 25% in M’sia’s largest duty-free outlet operator


The Zon duty-free outlet signage in Langkawi. (Photo taken by Hafidz Mahpar for Star Online)

KUALA LUMPUR: Atlan Bhd’s Singapore-listed subsidiary Duty Free International Ltd (DFI) has received an unanimous shareholders’ approval to dispose up to 25% equity interest plus one share in unit DFZ Capital Bhd - the largest duty-free retailing group in Malaysia - to Heinemann Asia Pacific Pte Ltd.

DFI said in a statement issued in Kuala Lumpur that the 25% stake comprised a 10% equity interest plus one share in DFZ, to be sold for 19.7 million euros (RM90.3mil) in cash, as well as two call options to purchase up to a further 15% equity interest in DFZ.

Assuming that Heinemann acquired an additional 15% equity interest in DFZ, the proceeds from the proposed disposal will be up to 52.21 million euros (RM239.3mil).

It said the proposed sale was targeted to be completed by June 2016.

DFZ has duty-free retail outlets, duty-free wholesale outlets and duty-paid retail outlets at various locations throughout Peninsular Malaysia such as Padang Besar, Langkawi, Bukit Kayu Hitam, KL International Airport and Johor Baru.

Singapore-headquartered Heinemann Asia Pacific is one of the leading multi-category duty free retailers at KLIA2, retailing under the brand “Be Duty Free”.

On completion of the proposed sale, Heinemann -- a wholly-owned subsidiary of Hamburg, Germany-headquartered duty-free goods supplier Gebr Heinemann SE & Co KG -- will be entitled to board representation on the board of directors of DFZ, allowing both parties to deliver the expected synergies in an efficient and timely manner.

DFI executive director Lee Sze Siang said DFI viewed Heinemann as a strong business partner and strategic investor.

“Going forward, we will be leveraging on their resources and expertise in the areas of purchasing, merchandising, product assortment/costing, retail store management, distribution and logistics management. We believe that this alliance will further enhance the overall travel retail experience in Malaysia, to bring us on par with the best available in the world,” 

Max Heinemann, CEO of Heinemann, said: “One of the key synergies for this alliance is the similar business models and corporate culture that both the organisations share. We are confident that this partnership will provide a sturdy platform for our expansion into South-East Asia.”

It was reported earlier that DFI planned to use 85% of the proceeds from the disposal for general corporate requirements including acquisition and funding potential business opportunities.

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