Sanpower Group Buys 89% of U.K.'s House of Fraser
Formal Announcement of Deal is Imminent
LONDON—China's Sanpower Group Ltd. has agreed to buy House of Fraser, the 165-year-old British department-store chain, in a deal valuing the company at around £450 million ($746 million), according to a person familiar with the deal.
Sanpower, which is controlled by the multimillionaire entrepreneur Yuan Yafei, will buy an 89% stake in House of Fraser, the person said, adding that the terms of the deal had been agreed and a formal announcement was "imminent."
The deal puts an end to speculation surrounding closely held House of Fraser's future, after it searched for a buyer for more than two years.
During that time the retailer, which has 61 U.K. stores, has considered a flotation on the London Stock Exchange LSE.LN +0.30% and has held talks with various potential buyers, including France's Galeries Lafayette SA and Mike Ashley, the British sportswear billionaire who controls Sports Direct International SPD.LN +0.66% PLC.
Reports in the U.K. Sunday said Mr. Ashley had purchased the remaining 11% in House of Fraser for around £50 million. A spokeswoman for House of Fraser and a spokesman for Mr. Ashley didn't respond to requests for comment.
Sanpower owns the Nanjing Xinjiekou department store, one of China's oldest, as well as a number of retail companies listed in Shanghai. The House of Fraser deal is Sanpower's first investment in the U.K. retail sector.
Mr. Yuan, a former government official, founded the group in 1993 to invest in China's growing service industry, according to the company's website. Sanpower owned assets worth 50 billion yuan ($8 billion) at the end of 2012.
A spokesman for Sanpower didn't respond to requests for comment on the deal.
From its start in Glasgow in 1849, House of Fraser has grown to be an upmarket staple of British high streets. The company has annual sales of £1.2 billion and employs 7,300 people.
By agreeing to sell to Sanpower, House of Fraser becomes the latest high-profile British brand to be bought by a Chinese company. In 2012, Bright Food Group Co. bought Weetabix, "Britain's favorite breakfast cereal," for £1.2 billion, while Gieves & Hawkes PLC, the Savile Row tailor, was recently purchased by Chinese clothing company Trinity Ltd. 0891.HK 0.00%
Even London's taxis are now produced by a Chinese company. In 2012, Manganese Bronze Holdings, maker of the black London cab, was bought by Zhejiang Geely Holding Group Co. for £11 million.