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Dairy Farm to acquire 18.25% stake in Philippines' Robinsons

Dairy Farm International Holdings Ltd. will acquire an 18.25% stake in Philippine-based Robinsons Retail Holdings Inc., the Hong Kong food retailer said March 23.

Dairy Farm seeks to create a food retail business in the Philippines through a partnership that will combine its stake in Rustan Supercenters Inc. with Robinsons. It will exchange its shares in Rustan Supercenters for new shares in Robinsons representing 12.15% of the company's shares valued at about $346 million. It will then acquire a further 6.1% interest in Robinsons for $174 million, for a total holding of around 18.25%.

Dairy Farm plans to fund the investment through existing cash and borrowings.

The Gokongwei family, the controlling shareholders of Robinsons, will continue to have a 51% stake in the retail group.

Upon completion of the deal, which is expected to take place within six months, Dairy Farm will have the right to nominate two directors to Robinsons' board. The combined group will have more than 1,700 stores in the Philippines.

The transaction is subject to the approval of the Philippine Competition Commission and the shareholders of Robinsons.