Companies

China's Fosun acquires 7.1% of Club Med

(Agencies)
Updated: 2010-06-15 14:09

Fosun, China's largest non-government controlled group, has acquired 7.1 percent of holiday resort operator Club Med, the first time a quoted Chinese group has taken a direct holding in a listed French company.

Club Med hopes to make China the No 2 market in the next five years while Fosun is keen to invest in Club Med, whose all-in one, integrated resorts appeal to well-heeled Chinese.

Fosun's board is chaired by the tycoon Guo Guangchang, one of China's richest men. Using Friday's closing stock market price, Fosun's Club Med stake is worth 23.38 million euros ($28.14 million).

The Chinese tourism market is estimated to have grown by about 10 percent a year and Club Med is hoping to attract 200,000 Chinese customers by 2015.

Club Med said it aimed to open five villages in China by then and would inaugurate its first village this winter in Yabuli, the largest ski resort in North-east China.

As part of the deal, Fosun pledged not to lift its stake beyond 10 percent if it reached that level, at least during the following 24 months, subject to no other shareholder having or wishing to acquire more than 10 percent.

Fosun said a representative would join Club Med's board and if its Club Med holding went beyond 9 percent, Fosun would appoint a second representative.

Shares in Club Med rose earlier this month after the French company said it was in talks with a Chinese partner, without providing details, as investors welcomed the arrival of a Chinese investor.

The stock, which has lost around 10 percent since January 1, is expected to rise on Monday when trading resumes.

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"Fosun will not only support Club Med's global strategy of upscale positioning and sharing China's growth opportunities," Guangchang said in a joint-statement with Club Med.

"But also use this opportunity to benchmark itself with international brands and standards in order to improve its ability to consolidate resources and manage its investment."

In additional to financial support, Club Med said it planned to rely on Fosun's local input regarding human resources, conference management, media and communications.

Fosun International, a company founded in 1992, operates in several markets, including real estate, steel, pharmaceuticals, mining and retail.

It has directly or indirectly invested in more than 100 companies, including Sinopharm Group, China's largest distributor of pharmaceutical products, outdoor advertiser Focus Media Holding and Nanjing Iron & Steel.