First Dufry, today Deutsche Bank, tomorrow the world!

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Martin Moodie
Martin Moodie is the Founder & Chairman of The Moodie Report.
Martin Moodie

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Having changed our brand (quite seamlessly I must say) last year to The Moodie Davitt Report, I am pondering a rather more radical amendment. Perhaps we should now become The HNA Report, such is the dominance of the headlines that the acquisitional Chinese conglomerate has achieved in recent months.

Barely a day seems to go by without the aviation-to-leisure giant being part of an investment or takeover. Today brought news that the Hainan group had raised its stake in Deutsche Bank to 9.9%, making it the firm’s largest shareholder. Earlier this week a report emerged in trade publication Cruise Industry News that HNA was eyeing an unnamed “major” cruise line. And of course, the big story for us was last week’s confirmation of HNA’s near 17% purchase of Dufry shares from Singaporean wealth funds GIC and Temasek.

HNA Group headquarters in Hainan, China

Dufry might have been surprised by HNA’s interest but it’s understandably relaxed, even happy about the development. Dufry Group CEO Julían Díaz put it neatly when he said: “From my side it sounds very positive. Our company is very interested in expanding in Asia. The opportunity with a company of that size, which manages millions of Chinese customers, from the tour operator side to the hotel side, sounds positive.”

As I have written before, I believe HNA’s play for Dufry (an arch acquisitor itself) is both serious and long term. We are looking at a future colossus in terms of the whole travel services chain.

Look at HNA’s acquisitions table below. Wow, this is some serious spending spree and whatever anyone says about restrictions on capital flow from China it sure doesn’t seem to be holding the Hainan group back.

It reminds me of  the early 1990s when DFS was an all-powerful force with the Japanese traveller, almost synonymous with Japanese shopping abroad. I wrote an April’s Fool spoof story, “DFS buys Japan”. It was about as unsubtle an April 1 story as you could write but it fooled a rival of DFS’s on Guam called Hakubotan, who wrote to me asking, “Please could you explain the details of this deal. This is very serious for us.”

Maybe next April I might have to revisit that story. This time though it might read, “HNA buys the world.” But, heck, this time it may just be true.

  • April 2017: HNA agrees to buy Brazilian group Odebrecht’s stake in RIOGaleão, which operates Rio de Janeiro Tom Jobim International Airport, according to reports quoting a government official. HNA will become joint
    holder of a controlling stake in the company.
  • December 2016: As reported, HNA completes acquisition of gategroup, the Swiss inflight services provider, in a transaction valued at CHF1.4 billion (US$1.47 billion).
  • December 2016: Completes acquisition of IT products and services company Ingram Micro through subsidiary Tianjin Tianhai Investment Company. The all-cash transaction is for US$38.90 per share with an equity value of approximately US$6 billion.
  • December 2016: Closes deal to acquire Carlson Hotels through subsidiary HNA Tourism Group. Also acquires Carlson’s 51.3% stake in Brussels-based Rezidor Hotel Group.
  • October 2016: China Duty Free Group parent company China International Travel Service votes at its board meeting on 28 October to create a joint venturewith Hainan Duty Free.
  • October 2016: Announces intention to purchase a quarter of Hilton Worldwide Holdings Inc. for US$6.5 billion.
  • October 2016: Buys CIT Group’s aircraft leasing business for US$10 billion.
  • May 2016: Agrees to purchase 13% of Virgin Australia for US$114 million, with plans to raise that stake to about 20%.
  • March 2016: Increases stake in Deutsche Bank from 3.04% to 4.76%.
  • March 2016: Acquires Manhattan’s 245 Park Avenue skyscraper for US$2.21 billion.
  • November 2015: Agrees to buy 23.7% stake in Azul Brazilian Airlines for US$450 million through subsidiary Hainan Airlines.
  • July 2015: Agrees to buy airport luggage handler Swissport International from PAI Partners for US$2.81 billion.

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