Nan Hai Corporation Limited (“Nan Hai” or “the Company”; HKEx stock code: 00680.HK ) today announced a conditional agreement to acquire, together with an independent third-party investment company, all of the 114,249,495 shares of CE Holdings Limited for a consideration of approximately USD 175 million (equivalent to HKD 1.356 billion). According to the agreement, 79,974,647 shares, or approximately 70% of the Sale Shares, will be acquired by Nan Hai’s wholly owned subsidiary GGC, and 34,274,848 shares, or approximately 30% of the Sale Shares, will be acquired by OBL, an independent third-party investment company. After the acquisition, CE Holdings Limited will become a non-wholly-owned subsidiary of the Company. CE Holdings Limited is an investment holding company which owns the global operations of the Crabtree & Evelyn brand.

Crabtree & Evelyn is a global consumer brand from Britain with more than 40 years of history which specializes in personal care and everyday home products. It embraces a business philosophy inspired by a refined culture and agreeable natural environment with the mission to improve the quality of life with products based on natural ingredients without using any artificial essences or chemicals. It offers top-quality products in extensive categories including bath and body, hand care, fragrance, hair care, food and home products which appeal to consumers through exquisite packaging, superb texture and a distinctive style and provide them with a satisfying pleasant experience. Crabtree & Evelyn has a global sales network with more than 4,000 outlets in more than 40 countries, including more than 200 wholly owned retail stores, distributors, franchises, department stores, e-commerce sites and tourist retail stores. There are 30 Crabtree & Evelyn franchised retail stores in Hong Kong. Although Crabtree & Evelyn hasn’t yet officially entered the Chinese mainland market, it has been well known and has a good number of loyal customers in this market.

Nan Hai is a diversified investment holding group with a long-term focus on industrial investments which incubate, foster, acquire and build industry leaders to grow company value. Through years of diligence and perseverance, Nan Hai has had three industry-leading companies in real estate development (Nanhai Development Company Limited), culture and communications (Dadi Media Limited), and business IT application services (Sino-i Technology Limited; HKEx stock code: 0250.HK). Dadi Media Limited owns the national cinema chain “Dadi Digital Cinema” and a number of cinema-related subsidiaries.

As of November 30, 2015, Dadi Digital Cinema had over 270 directly operated cinemas across China in addition to more than 300 in the pipeline. For the first 11 months of 2015, Dadi Digital Cinema served more than 64 million guests with box-office revenue topping RMB 2 billion, approximately 47% year on year, ranking second among cinema chains in China, next only to Wanda Cinema Line Corporation. Since its establishment, Dadi Digital Cinema has achieved a rapid business growth, recording a compound annual growth rate of approximately 40% in box-office receipts over the past three years (from 2011 to 2014), outperforming the national average by approximately 9%.

Nan Hai follows a development model of diversified industrial investments based on its core resources and capabilities. Dadi Digital Cinema, leveraging the experience of Nan Hai's IT service business which has chain operations in more than 80 cities across the Chinese mainland to tap the largely unexplored cinema market in second- and third-tier cities, has established outlets in more than 100 second- and third-tier cities in a very short period of time to appeal to the "town youth" group. In the process of Dadi Digital Cinema’s development, the Company has seen the rapid growth of China’s young consumer market, accumulated significant experience and capabilities in achieving high-speed growth in this market, and developed a massive base of loyal customers, laying the core foundation for Nan Hai’s future investments and operations in the consumer market.

China is now the world's largest consumer market in terms of development potential, development speed, emerging consumption growth, and consumption upgrade potential. With China’s economic transformation and accelerated urbanization, China’s consumer market is set to undergo profound changes in the coming decade, especially marked by the transition from the satisfaction of basic necessities of life such as food, clothing and shelter to the pursuit of consumptions that improve the quality of life. The consumer demand for high-quality products and services will significantly increase and create huge market opportunities. The main consumer group underlying this demand will be China’s growing middle class population and will include not only the affluent consumers in first-tier cities but also the “town youth” that Dadi Digital Cinema mainly serves in second- and third-tier cities and that will become a massive reserve force of China’s emerging middle class.

Eyeing this vast emerging blue ocean market, Nan Hai has made a long-term development strategy targeting the consumer group pursuing a high-quality life - the “Cinema +” Strategy - which involves the creation of a comprehensive “Dadi Creative Business” system with Dadi Digital Cinema at its core. Dadi Digital Cinema put forward the “Cinema +” Strategy at its 2016 Strategy Press Conference in October 2015. According to the strategy, Dadi Digital Cinema will, with its huge customer base built over the years at the core, make comprehensive innovations and breakthroughs, integrate resources and strengthen cross-domain cooperation to build an experiential cinema ecosystem based on cinema-related business formats such as “Cinema + Creative Retail”, “Cinema + Creative Restaurant” and “Cinema + Creative Internet” and implement in-depth operations focusing on film fans. The present acquisition of Crabtree & Evelyn marked the comprehensive commencement of the “Cinema + Creative Retail” component of Dadi Digital Cinema’s “Cinema+” Strategy.

Nan Hai’s management believes that the acquisition of Crabtree & Evelyn will create significant synergy with the core capabilities and premium resources of the Company’s existing operations such as Dadi Digital Cinema and powerfully serve the Company’s long-term strategy in the consumer market. On the one hand, Crabtree & Evelyn’s extensive range of top-quality products will expand the product line of the “Dadi Creative Business” system, support in-depth operation of the existing customer base, and improve customer loyalty and brand reputation. Meanwhile, Dadi Digital Cinema’s massive cinema network, powerful expansion capability and rich chain operation experience in the Chinese mainland will help Crabtree & Evelyn enter the mainland market and establish its distribution network in a short time. While expanding its business, the Company will push a series of changes at Crabtree & Evelyn, including resource integration, brand rebuilding, supply chain optimization and new product development, to comprehensively improve Crabtree & Evelyn’s business performance. Going forward, Nan Hai will comprehensively achieve cross-domain integration by connecting various business formats through a member cloud transaction platform based on the "Cinema +" Strategy, aiming to develop the "Dadi Creative Business" into a leader in China's commercial market in the coming five to ten years.