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Heavy! Li Ka-shing plans to expand Australian retail industry! Watsons plans to purchase 92 Priceline stores
This article is forwarded from the WeChat public account: Sydney Today
Today’s topic
With the support of Hong Kong tycoon Li Ka-shing,
One of the largest retail pharmacy operators in Asia
We are planning to enter the Australian market.
The target is directly at Priceline pharmacy outlets that are in deep financial trouble.
It is reported that,
Since the late 1990s,
Li Ka-shing has invested heavily in Australia.
Involving areas such as infrastructure, energy, and real estate.
01
Asian retail giants enter the market, sparking competition from multiple parties
AS Watson is a medical beauty group controlled by Hong Kong multinational giant CK Hutchison Holdings. It owns well-known chain brands such as Watsons and Superdrug.
If the company decides to acquire the 92 Priceline pharmacies previously operated by Infinity Pharmacy Group, it will need approval from the Foreign Investment Review Board (FIRB).
The Watsons pharmacy chain operates in Asian and European markets. Image source: Bloomberg
An Asian pharmacy giant is preparing to conduct due diligence on the assets, according to people familiar with the matter.
It is also reported that senior executives of Watsons visited Australia a few years ago and met with the founding partners of Infinity at the time, which shows their long-term attention to the Australian market.
Currently, CK Hutchison Holdings holds a majority stake in Watson Group, while Singapore sovereign fund Temasek Holdings also holds a small stake.
In response to this “market rumor”, a spokesman for Watsons Group said it would not comment.
02
Li Ka-shing has a strong presence in Macao, and the pharmacy territory may be expanded again
In addition to Watsons, Chemist Warehouse, TerryWhite Chemmart and a number of private equity companies are also eyeing these stores.
Since the late 1990s, Li Ka-shing has invested heavily in Australia’s infrastructure, energy, agriculture and real estate sectors.
Although the 97-year-old business legend handed over control of the empire to his eldest son Victor Li in 2018, he still exerts influence in major decisions.
Currently, administrator Teneo is responsible for the sale of these 92 Priceline stores.
Infinity was placed into receivership in December last year due to heavy debt.
Data shows that Infinity owes approximately A$110 million to Australian Pharmaceutical Industries (API), a subsidiary of Wesfarmers, and the total amount owed to secured creditors is more than A$400 million.
Current options include an overall sale, recapitalization or split sales by regional clusters.
About 25 parties have been approved to conduct due diligence, and preliminary quotations are expected to be announced in early March.
Although many Chinese want to acquire WatsonsPriceline welcomes the move, but the Pharmacy Guild is concerned the sale of Priceline pharmacy outlets could reduce competition.
It is worth noting that of the 92 pharmacies managed by API, 72 carry the Priceline brand.
The Pharmacy Guild of Australia expressed concern about the deal, believing it could lead to excessive market consolidation and further weaken competition in the industry.
The association has made it clear that it plans to write to state pharmacists’ councils and the Australian Competition and Consumer Commission (ACCC) to formally express concerns that this large-scale acquisition may lead to monopoly.
03
The growth path of Li Ka-shing and Watsons
Li Ka-shing was born in Chaozhou, Guangdong in 1928. His family was poor in his early years. With his extraordinary vision and perseverance, Li Ka-shing
Starting from a small plastics factory, it gradually expanded its business territory, and eventually built a Cheung Hutchison business empire spanning real estate, ports, retail, energy, telecommunications and other fields.
He has been the richest man in Hong Kong for 21 consecutive years and the richest Chinese man for many years. He is the business benchmark in the hearts of countless people.
Watsons was born in Guangzhou in 1841. It was initially just a small and inconspicuous pharmacy. It was not until 1981 that it was acquired by Hutchison Whampoa, owned by Li Ka-shing, and officially embarked on a path of large-scale and global expansion.
Today, Watsons not only has roots in more than 500 cities in mainland China and has more than 65 million members, but also operates more than 16,000 stores in more than 30 markets around the world.
It focuses on a model that combines online and offline services, covering all categories such as beauty, skin care, health, and personal care. It has also become one of Li Ka-shing’s most competitive core assets in his business landscape.
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