HKEX-Listed Madison Plans to Acquire BitOcean Crypto Exchange

The wine company is planning to buy 67.2% of BitOcean for almost $30 million.

Hong Kong Stock Exchange-listed Madison Holdings Group is planning to buy a majority stake in the Japanese cryptocurrency trading platform BitOcean via a subsidiary called Madison Labs, according to a South China Morning Post (SCMP) report.

As per the fillings in the Hong Kong exchange, Madison Labs is set to acquire 67.2 percent of BitOcean from independent third parties for 1.68 billion yen ($15.12 million). Another $15 million will be paid as various acquisition related fees.

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This is a massive move for a firm like Madison, which is known for its fine French wines and having no experience in the crypto industry. However, this acquisition might open new business opportunities for the firm as BitOcean is one of the 16 registered firms licensed to trade cryptocurrencies in Japan. It, however, did not start trading operations yet.

Diversifying Businesses

Madison is one of the largest wine companies in the world with a market valuation of more than HKD 4.1 billion (around $534 million). Executives at Madison see this investment as diversification of the firm’s core business. SCMP quoted Raymond Ting Pang-wan, the chairman at Madison: “Our wine business is stable and profitable, but then it is small. It is hard to make wine trading into a very big business. This is why we have to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders.”

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Moreover, HDR Cadenza Management, a sister firm of the cryptocurrency exchange BitMEX, is also in talks with Madison to create a joint venture holding 51 percent of it worth 17.14 million.

“Virtual currencies and blockchain are getting more popular. Investing in the virtual currency sector will expand our income source,” stated Ting.

Although Bitcoin and the cryptocurrency market as a whole are going through a tough time, Ting is very optimistic about the future of the market. According to him, it is the best time to enter the market with long-term goals in sight. “Japan represents about 20 percent of bitcoin trading worldwide. Japan and the US are the only two markets that have a licensing system for such trading platforms. We wanted to invest in a platform that was under proper regulation,” he added.

Financial Experience

Although it is taking its first step towards the crypto industry, Madison is not new to the financial sector. Citing business diversification as the reason the wine mammoth, last year, acquired a majority stake in Eternal Pearl Securities, a securities and asset management company, and also brought a significant number of shares of CVP Capital and CVP Asset Management.

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