Investors are seeking to diversify their businesses, with many opting for cross-border mergers and acquisitions (M&A) in an attempt to gain geographic expansion and access to new markets.
However, cross-border M&A deals are seen as more complex transactions when compared with their domestic equivalents, which explains why domestic deals outnumber the cross-border ones in several sectors, including retail.
Nevertheless, Investment Monitor has identified five cross-border deals that have been key for the retail sector in 2022.
Frasers Group increases stake in Hugo Boss
The UK retail company Frasers Group has increased its investment in the Germany-based fashion company Hugo Boss.
More specifically, a document seen by Investment Monitor states that Frasers Group has 3,425,000 shares of common stock, representing 4.9% of Hugo Boss’s total share capital. In addition, the document also mentioned that the group has 18,289,000 shares of common stock via the sale of put options, representing 26% of Hugo Boss’s total share capital.
It is understood that this deal is set to help Frasers Group expand in the German market.
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Cencosud enters definitive agreement to acquire the Fresh Market
The Chilean retailer Cencosud has entered a definitive agreement with funds managed by Apollo to acquire a 67% stake in the Fresh Market, a US-based operator of a chain of supermarkets.
More specifically, the Fresh Market is a premium specialty grocer offering a variety of high-quality fresh products and a curated in-store meal offering, which has 160 stores across 22 states.
The press release says that Cencosud is set to expand its geographic diversification with approximately 12% of pro forma revenues coming from the US due to this transaction.
Meko acquires Koivunen
The Sweden-based car spare parts and accessories retailer Mekonomen (Meko) has acquired the Finland-based automobile spare parts and service business Koivunen for an enterprise value of €122m ($128.8m) on a cash and debt-free basis.
It is also stated that “the acquisition is expected to generate annual synergies of SEK40m with full effect during 2024. Transaction costs for the acquisition are estimated at SEK25m.”
Canopy Growth agrees to acquire Jetty Extracts
The Canada-based cannabis company Canopy Growth has entered into a definitive agreement to acquire Lemurian, a US-based producer of high-quality cannabis extracts and a pioneer of clean vape technology.
The acquisition is set to broaden Canopy Growth’s portfolio with significant opportunities to expand in North America.
When it comes to the transaction details, the press release states that “the agreements are structured as two separate option agreements whereby Canopy Growth has a call option to acquire up to 100% of the equity interests in Jetty”.
Autosports Group acquires Auckland City BMW
Autosports Group, an Australia-based luxury retail automotive group, has entered into an agreement to acquire 100% of the shares of Auckland City BMW, a New Zealand-based BMW dealer.
“This transaction is another key progression of our growth strategy, which will deliver numerous benefits for our group and our shareholders,” said Autosports Group CEO Nick Pagent in a press release. “It provides immediate scale as we enter the New Zealand luxury auto brands market enhancing the geographic diversity and reach of our business beyond Australia.”