Fosun teams with AXA for Club Med buyout

The Chinese conglomerate and European private equity firm have offered $700m to acquire the French resort operator to boost the company’s development in China.

Fosun International and AXA Private Equity have partnered to buy Paris-listed French resort operator Club Méditerranée, according to a statement from the firms. 

The pair offered $700 million for all shares and securities in the business, which is now subject to approval from an independent board of directors. The offer equals a price of €17 per share, representing a premium of 28.4 percent over the company’s average share price during a 30-day trading period. 

The origin of the deal goes back to 2010, when cross-border firm 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. 

Today, Club Med is facing challenges in Europe’s difficult tourism market, particularly in France. The move into emerging markets, as well as taking larger market share in developed economies, are critical steps. 

“We are very happy to support Club Méditerranée for this new step of its development. We have been working with the management for two years to accelerate its strategy worldwide,” Dominique Gaillard, member of the executive committee of AXA, said in the statement.

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

Jiannong Qian, general manager, Fosun International

Jiannong Qian, general manager of Fosun added, “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 marks a growing trend of cross-border transactions between Europe and China.

Fosun International is raising a $1 billion fund to target these opportunities, which is expecting a $300 million first close in June, Private Equity International reported earlier. 

Other funds doing the same include a €250 million vehicle managed by A Capital and Mandarin Capital Partners, which is targeting €500 million for its latest fund.