French luxury goods conglomerate LVMH’s DFS has reached an agreement to divest its travel retail operations in Greater China to China Tourism Group Duty Free (CTG Duty-Free).
Under the agreement, DFS will divest its stores and certain regional brand rights.
CTG Duty-Free will assume control of the company’s travel retail locations in Hong Kong and Macau, together with the associated intangible assets.
The acquisition will be executed through China Duty Free International Limited, CTG Duty-Free’s wholly owned subsidiary.
The purchase will be completed in cash, and the divestment applies solely to DFS’s Greater China business.
Following the transaction, DFS will continue to operate its luxury travel retail activities outside of Greater China.
Closing remains subject to customary conditions, with completion anticipated in roughly two months.
DFS chairman and CEO Ed Brennan said: “The sale of our Hong Kong and Macau stores marks an important step for DFS. DFS’s well-established presence and operational excellence in Hong Kong and Macau is an achievement we take great pride in.”
In a separate arrangement tied to the sale, LVMH and the Miller Family - relatives of DFS co-founder and shareholder Robert Miller - will subscribe to newly issued H-shares in CTG Duty-Free as part of a capital increase.
This investment will be made once the transaction closes and will represent a small portion of the proceeds received.
CTG Duty-Free and LVMH have also entered a memorandum of understanding establishing a framework for broader retail cooperation across Greater China.
CTG Duty-Free executive director and president Luke Chang added: “This move will further expand CTG Duty-Free’s service network across the Greater Bay Area, aiming to build a platform for promoting China-chic brands globally and establish an international business mid-platform.”
The agreement outlines potential areas of collaboration, including brand visibility, cultural initiatives, travel-related services and customer experience, in line with the operating model of LVMH’s Maisons.
