Two of Hong Kong’s biggest conglomerates are in talks over a possible merger of ParknShop and Wellcome, the city’s two biggest supermarket chains. according to for the Financial Times (FT).
The FT reported on Friday that Jardines was in “negotiations” with tycoon Li Ka-shing’s CK Hutchison to buy ParknShop and merge it with Wellcome, citing four anonymous sources familiar with the matter.
The report quoted a source as saying: “Talks have been ongoing for some time, but a deal is not imminent.” The FT’s source declined to comment on the assessment.
ParknShop is owned by CK Hutchison’s AS Watson group, while Wellcome is operated by DFI Retail, a subsidiary of Jardines.
There are approx 260 ParknShop branches across Hong Kong and Macau, and approx 280 Wellcome stores, according to publicly available information from the two supermarket chains.
The city’s two biggest supermarket chains have been bitter rivals for decades. If a deal is reached, their merger would create a dominant player in Hong Kong’s food retail market.
The FT quoted the US Foreign Agricultural Service as saying that AS Watson and DFI Retail together controlled close to 90 per cent of the city’s supermarket sector in 2023.
However, the report also noted “increasing competition from e-commerce and from Hong Kong shoppers crossing the border to shop at lower prices in mainland China”.
One of the sources in the FT report said the combined group’s market share would be less than 50 per cent, citing an “internal estimate”.
A spokesman for DFI Retail said the company does not comment “on rumours or speculation”.
A spokesman for AS Watson said the firm declined to comment on “market speculation”.
