BREAKING NEWS: TRBusiness understands that Beijing and Shanghai airports duty free concessionaire Sunrise Duty Free has sold a 51% share in the company to the China Duty Free Group (CDFG).

 

Unconfirmed rumours had been circulating earlier today that CDFG may have purchased a majority holding and also that CDFG President Charles Chen has been linked with a position on the main board.

 

For the uninitiated, Sunrise Duty Free operates the duty free airport concessions and specialist shops at Beijing Capital, Shanghai Pudong and Shanghai Hongqiao airports.

 

TRBusiness further understands that it was the Boyu Capital company that appears to have sold its shareholding to CDFG’s parent company China International Travel Service Corporation (CITSC). Boyu is a China-focused private equity company that was co-founded several years ago.

 

HUGE NEW DUTY FREE FORCE IS EMERGING

While TRBusiness’ sources for this breaking news prefer to remain anonymous, this merger will obviously create a huge duty free force with coverage across all three Beijing and Shanghai airports – plus CDFG’s comprehensive 230-strong network of border stores, airport outlets, its huge Sanya downtown store and its small overseas duty free business in Cambodia.

 

CDFG has already benefitted hugely from last year’s merger of its parent CITSC with the China National Travel Service Group, which effectively created a RMB120bn ($19.2bn) giant.

 

For its part, Sunrise Duty Free is understood to have recorded duty free sales worth around RMB10bn ($1.6bn) in 2015.

 

However, it also faces a number of big challenges, including retail tenders at both Beijing and Shanghai Hongqiao and the prospect of a brand new airport being built in Beijing in 2019.

 

TRBusiness’ Asia sources also understand that today’s news follows Sunrise Duty Free’s recent presentation to Hong Kong International Airport management with regard to its imminent tender offer relating to the current duty free request for proposals. Whether it finally decides to bid or not remains to be seen, although it may not feel the need to considering the aforementioned change if CDFG is also in the running.

 

This new marriage between Sunrise and the CDFG also effectively removes one competitor from the duty free concession bid at Beijing Capital Airport when that business finally goes to tender.