Heinemann Asia Pacific’s investment in Malaysia’s Duty Free International (DFI) – expected to be completed by the end of this month – will “provide a sturdy platform for our expansion into southeast Asia” according to the subsidiary of global duty free and travel retail powerhouse, Gebr. Heinemann.

Malaysia’s Duty Free International (DFI) received backing from shareholders earlier this week to sell up to 25% equity interest (as previously reported), plus one share in DFZ Capital (DFZ), its wholly-owned subsidiary, to Heinemann AP.

The deal will give Heinemann AP a 10% stake plus one share in DFZ, as well as two call options to purchase another 15% equity interest in DFZ. The approved sale is set to be completed by the end of June upon which Heinemann will be entitled to representation on the DFZ board of directors.

SALES ROSE TO $146m

DFI, which in DF&TR is present under ‘the Zon’ brand name, claims to be the largest multi-channel DF&TR outlet operator in Malaysia. Its core businesses encompass DF&TR, as well as hospitality services, and consolidated sales in FY2016 (ending February) hit MYR604.5m/$145.7m, up from MYR561m/$135m (see below).

With a track record of more than 35 years in the region, DFI has a presence at leading entry and exit points in peninsular Malaysia including operations at international and domestic airports, seaports, border towns, duty free islands and other tourist destinations. It therefore offers Heinemann a strategic entry into a growing market, and into the wider region.

DFI has previously said that it “will be exploring opportunities with market players to expand its presence and duty-free operations in Singapore and the region”.

Lee Sze Siang, Executive Director of DFI, comments: “We view Heinemann as a strong business partner and strategic investor. The completion of the proposed sale will bring significant positive changes to DFZ. Going forward, we will be leveraging on their resources and expertise in the areas of purchasing, merchandising, product assortment/costing, retail store management, distribution and logistics management. It will also further strengthen DFI’s financial position and allow the company to consider future business opportunities.”

Max Heinemann, CEO of Heinemann AP, adds: “One of the key synergies for this alliance is the similar business models and corporate culture that both the organisations share. We are confident that this partnership will provide a sturdy platform for our expansion into southeast Asia.”

Heinemann AP, headquartered in Singapore, is a wholly-owned subsidiary of Germany-based Gebr. Heinemann which had a global turnover last year of €3.6bn. The regional division has a multi-category DF&TR business at Kuala Lumpur’s KLIA2 terminal trading as ‘be Duty Free’ and at Sydney Airport in Australia, it operates the world’s biggest DF&TR store under the Heinemann Duty Free brand.