Chinese investment group Fortune Fountain Capital has signed an agreement to buy French crystal maker Baccarat for 184 million, the latest move in a pattern of global expansion by Chinese companies as China's financial strength has flourished.
As per the binding agreement, FFC would acquire a controlling 88.8-percent stake in the glassmaker for 164 million euros (US184 million), at 222.70 euros per share, from investment firm Starwood Capital Group and L Catterton, a private equity firm with 14 billion in assets formed in partnership between Catterton, LVMH and Groupe Arnault.
Established in 2011, FFC is a Beijing-based financial group that focuses on asset and equity investment. According to the information listed on its official website, the company’s assets under management (AUM) exceed RMB 10 billion (US1,469,430,000). In 2016, the group acquired Honey New Zealand Group, the producer of New Zealand‘s renowned honey brand Manuka’s, in collaboration with a domestic Chinese insurer Sunshine Insurance Group (which made headlines in 2015 when it purchased the Baccarat Hotel in New York for 230 million, making it the most high-valued hotel property at the time).
The purchase of Baccarat, the 250-year-old Parisian fine crystal producer, further indicates the strong appetite by Chinese companies in acquiring upscale European luxury labels to diversify their investment portfolios, as the hospitality and luxury industry has taken off in the world’s second-largest economy in recent years.
In the past, some high-profile players including Anbang Insurance Group, Fosun International and HNA Tourism have entered into merger and acquisition deals with many prominent Western brands such as Waldorf Astoria and Club Méditerranée.
The Baccarat and FFC deal is also set to aid the brand’s international expansion into emerging markets such as Asia and the Middle East, regions that are still seeing dynamic economic growth in comparison to the sluggish European market.
“We share the same vision for the future of our business, especially regarding the expansion into new products and geographies, such as Asia and North America,” Daniela Riccardi, Chief Executive Officer of Baccarat, said in a statement.
“We will benefit from FFC's financial strength and expertise in these markets, as well as from its extended base of partners and clients in the luxury industry."
The Chinese buyer has promised to preserve Baccarat's “Made in France” identity after the acquisition. “We will support the development of the company," said FFC Chairman Coco Chu in a statement, "relying on Daniela and her talented team, who are best suited to drive Baccarat's upcoming development strategy."
In 2016, for the first time in four years, Baccarat’s annual revenue had grown, according to Reuters, gaining 148.3 million euros.