Haidilao (6862.HK), China’s largest hotpot restaurant chain which operated 593 restaurants, with 550 in mainland China aims to reap “synergy” and business growth from the acquisition targets.
The hotpot company has inked a non-binding memorandum of understanding on the “possible” acquisition of four companies, including Shanghai Yuanshu Catering Management, which runs nine Chinese food restaurants under the brand “Madam Zhu’s Kitchen” in Beijing, Shanghai and Hangzhou.
Apart from Shanghai Yuanshu Catering Management, Haidilao is also on the acquisition spree are Hao Noodle & Tea and Hao Noodle — each of which operates one noodle restaurant under the brand “Hao Noodle” in New York — and Shanghai Haocui Catering Management, which runs a “Hao Noodle” shop in Shanghai.
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Any of the possible acquisition will be subject to due diligence, negotiation and formal agreement. The seller has agreed to negotiate exclusively with Haidilao for six months. Once the acquisition is confirmed, these companies could serve as a great revenue source for Haidilao, which in turn create a higher shareholding return.