Fosun enters into formal deal with Shanghai Yuyuan Tourist Mart
A delay of two projects on the mainland has prompted Fosun to sign a formal agreement to inject a suite of real estate companies into Yuyuan in an all-scrip deal worth ￥24.16 billion ($3.52 billion).
Six months ago the Chinese conglomerate Fosun signed off on a reorganisation for the sale of 28 group subsidiaries to its listed equity affiliate.
As the transfer involves the exchange of shares, Fosun will end up increasing its 26.5 per cent stake in Shanghai Yuyuan Tourist Mart, as at 30th June 2017, to 69.7 per cent.
The ultimate goal behind the asset injection and reorganisation is to turn the current equity affiliate into the conglomerate’s listed platform for the ‘happiness’ pillar of its ecosystem business model.
The group’s happiness segment includes two major parts: tourism and leisure, and consumer and lifestyle.
In terms of the spin-off, the deal should lead to a more focused development and allocation of resources while enabling the parent to continue to benefit through the receipt of dividend distributions of the suite of real estate companies.
Yuyuan is mainly focused on the commercial retail and wholesale, and sale, of gold and jewellery, and operates over 1,500 stores under the two brands Laomiao Gold and Yayi Jewelry.
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