Private Equity Deals & Transactions

Fosun, Ardian clinch €939m Club Med deal

The Chinese conglomerate led a two-year takeover battle for the French resort operator

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Fosun International and French private equity investor Ardian have completed the buyout of French resort operator Club Méditerranée, the deal valuing the business at €939 million.

The consortium now owns 92.8 percent of the company, according to market regulator AMF.

Fosun, an existing investor in the hotel and resort operator, teamed up with Ardian (formerly AXA Private Equity) in May 2013, offering $700 million for the business.

Subsequently, a number of bids were submitted by various parties over a two-year period, ending with Fosun and partners offering €24.60 per share in December, forcing rival Italian investor Andrea Bonomi to withdraw.

“We can now get on the with the work we started almost five years ago to support the development of Club Med in France and in fast-growing markets,” Jiannong Qian, chairman of Gallion Invest II, the special purpose vehicle set up by Fosun for the investment, was quoted as saying by media.

The deal also serves as an exit for cross-border private equity investor A Capital.

The origin of the deal goes back to 2010, when A Capital approached Fosun for a partnership to boost Club Med’s development in China and also increase its exposure to Chinese travelers worldwide. A Capital, together with Fosun, then acquired a 7.1 percent stake in Club Med, which was later increased to 10 percent.

Qian said earlier, “The last three years have given us the opportunity to know and appreciate the company as well as the skills of its managers. I am convinced that together with AXA Private Equity and the current management, we have the means to face short-term uncertainties to support the development of Club Méditerranée, in particular in Asia, and consolidate its positions in Europe.”

The deal is finalised as a growing number of private equity firms are successfully completing cross-border transactions, which will serve as a way for European or other foreign businesses to expand into Asia, particularly China.

Notable cross-border deals last year include the $1.5 billion takeover of UK restaurant chain PizzaExpress by Chinese private equity firm Hony Capital, and Baring Private Equity Asia’s investments in Grenada’s St. George’s University and UK retail business Cath Kidston.