KKR Invests in VATS, China’s Largest Liquor Store Chain

KKR is investing VATS Liquor Store, China’s largest liquor store chain. The global PE firm didn’t disclose how much it was investing. VATS, of Beijing, operates more than 270 liquor stores in mainland China. KKR is a New York PE firm.


KKR today announced its investment, through its funds, in VATS Liquor Store (“VATS” or “the Company”), the largest nationwide liquor store chain operator in China.

“KKR is a world-class institutional investment firm and a pioneer in the global private equity industry, with an outstanding investment track record globally and within China,” said Mr. Xiangdong Wu, Chairman of VATS.  “We are proud to have KKR as our shareholder, which validates VATS’ long-term growth potential and proven business model. We truly appreciate KKR’s investment philosophy of partnering with management to add value for portfolio companies. KKR’s extensive expertise in the global consumer and retail space will bring tremendous value to VATS both in advancing our operational capability and maintaining sustained and rapid growth.”

According to China’s National Bureau of Statistics, annual sales of China’s white liquor market are approximately $27 billion and the consumption of bottled white liquor has grown at 20% CAGR in the past five years. The partnership between VATS and KKR marks a collective effort to seize the growth opportunity in China’s liquor industry, and to promote healthy development of the market.

“We are excited to be partnering with VATS, the leading franchise in China’s liquor distribution industry,” Xiang Li, Managing Director of KKR Greater China, said.  “We look forward to fully utilizing our global resource and expertise, working closely with the outstanding management team at VATS to support the future development of the Company.”

About VATS

Founded in May, 2005, VATS operates more than 270 liquor stores covering all provinces in mainland China. The Company thrives on providing customers with high quality authentic liquor products through its extensive nationwide retail network. The Company holds sole distribution rights to a diversified and valuable portfolio of leading premium Chinese liquor brands, including Wuliangye Vintage Series, Guyuelongshan Vintage Series, Zhenjiu and Xiangjiao. The Company also distributes local premium wine brand Shangri-la wine, top French wines such as “Petrus”, “Lafite”,” Latour” and scotch whiskey “Laphroaig”.

About KKR

Founded in 1976, KKR is a leading global investment firm with $55.5 billion in assets under management as of September 30, 2010. With over 14 offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. Since inception, KKR has completed multiple private equity investments with a total transaction value in excess of $430 billion and the portfolio companies in the firm’s private equity funds have over $200 billion of annual revenues and more than 900,000 employees.  KKR seeks to create value in its private equity investments by working as a partner with management and bringing global resources and operational expertise to its portfolio companies. KKR invests in high-quality franchises across multiple industries and geographies, including Asian investments such as International Far Eastern Leasing, China Modern Dairy, and Oriental Brewery, among many others, and current and previous retail and consumer product investments such as Del Monte, Sealy, Dollar General, Pets at Home, WILD, Duracell, Gillette, RJR Nabisco and Safeway. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional information, please visit KKR’s website at www.kkr.com.