Fosun buys baijiu distillery Tuopai Shede for US$694 million in bargain acquisition ahead of China’s economic rebound

Fosun will buy a 70 per cent stake in the liquor and spirits maker for 4.53 billion yuan (US$694 million) in cash, the company said in a December 31 exchange filing. This is the second such investment in 2020 by the Fosun Group after it bought a 30 per cent stake in another maker of the fiery wine – a hot favourite in China – in July.

The transaction underscores the domestic push under way at the insurance-to-tourism conglomerate as the Chinese economy rebounds from a pandemic-induced slowdown, even as Western nations still struggle to contain the coronavirus outbreak.

Fosun is “optimistic about the potential growth of the target company which operates a high-quality liquor and spirits business,” it said in the filing, adding that the deal will cement its foothold in businesses which “support the lifestyle” of modern Chinese consumers.

Its founder Guo said in March that it will seek out investment opportunities as the “once-in-a-century” coronavirus pandemic sparks an asset-price downturn. Fosun is one of the largest and last remaining acquisitive Chinese groups. Its businesses span health care, insurance, tourism and leisure, and about 45 per cent of its revenue was from overseas in 2019.