In an unprecedented move, Lotus, the luxury seafood company which owns a 50 percent stake in Hong Kong’s largest restaurant chain, has agreed to sell part of its shareholding in Hong-Kong’s largest food company to a Chinese billionaire.
The sale of Lotus’s 20 percent stake, announced in September, will be made to the Shanghai-based China Ocean Investment Group (CIIG), which owns stakes in the likes of McDonald’s and Pizza Hut, the two largest Chinese restaurants in the world.
Lotus is also buying a 51 percent stake owned by China’s largest wine company, which is a minority stake in the firm.
But this deal will be a big one.
The Chinese company will control 90 percent of the global market for the company’s prized “lotus” seafood products.
And it will be able to negotiate with the company for much larger deals in future.
This is because CIIG is now in the process of buying stakes in companies like Cargill and KFC, the fast food chains with which Lotus has enjoyed a longstanding relationship.
The new Chinese ownership group, CIIG, is expected to announce a new slate of acquisitions over the next few years.
It is not clear yet whether the new ownership group will have the same kind of stakes in its food business.
The deal with CIIG has also raised questions about the sustainability of Lotus, which in the past has been dogged by corruption scandals and allegations of bribery.
The company’s business model was once a way for Chinese businessmen to launder their money, especially after its chairman was sentenced to 15 years in prison in the 1990s for bribery.
Lotus, whose name derives from the Latin word for “sea,” is a subsidiary of a Chinese conglomerate.
It has grown from a Chinese-language chain of noodle shops in Hongkong to a sprawling chain of food outlets, restaurant chains, and wholesale seafood processing plants, which are sold in more than 50 countries around the world, including the United States, France, the Netherlands, Italy, Japan, Canada, Australia, and South Korea.
Lotus has been involved in Hong, Singapore, and Taiwan, and it has opened a number of restaurants in Beijing and Shenzhen, where it operates an outpost.
In the past, its sales and distribution of seafood have come under scrutiny in China.
Earlier this year, a Hong Kong court ruled that Lotus had been misusing its rights to sell food to customers in Hong.
CIIG announced its intent to buy a 51.5 percent stake last September.
According to Reuters, the deal was negotiated by CIIG’s chief executive officer, Liu Chunying, and chairman Zhang Xinping, who is also a Chinese citizen.
The announcement comes after CIIG agreed to pay $1.7 billion for a controlling stake in a Chinese wine company in 2012, a deal that was widely seen as part of a broader effort to increase its stake in food.
The CIIG group, which has a market value of $6.8 billion, also owns stakes at five of the world’s largest seafood processors.
Last year, CIOG agreed to buy the minority stake of another food company, Hormel Foods.
It will also buy a controlling interest in the company that owns Hormen Foods’ seafood processing operations, a company that produces fishmeal and other food products, the report said.