Fosun Buys Chinese Baijiu Maker for $694 Million in Local Pivot
(Bloomberg) -- Fosun International Ltd. is acquiring a controlling stake in Sichuan Tuopai Shede Group Co., boosting its presence in the coveted baijiu liquor sector as the Chinese conglomerate led by billionaire Guo Guangchang pivots inward for growth.
Fosun will buy a 70% stake in the liquor and spirits maker for 4.53 billion yuan ($694 million) in cash, the company said in a Dec. 31 exchange filing. This is the second such investment in 2020 by the Fosun Group after it bought a 30% stake in another maker of the fiery wine -- a hot favorite in China -- in July.
Fosun is “optimistic about the potential growth of the target company which operates a high-quality liquor and spirits business,” it said in the filing, adding that the deal will cement its foothold in businesses which “support the lifestyle” of modern Chinese consumers.
Its founder Guo said in March that it will seek out investment opportunities as the “once-in-a-century” coronavirus pandemic sparks an asset-price downturn. Fosun is one of the largest and last remaining acquisitive Chinese groups. Its businesses span health care, insurance, tourism and leisure, and about 45% of its revenue was from overseas in 2019.
The conglomerate is now betting on its pharmaceuticals division to offset the slump as its unit Shanghai Fosun Pharmaceutical Group Co. gears up to market Pfizer-BioNTech’s coronavirus vaccine in Hong Kong.
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