Li & Fung makes strategic move to divest its Asia consumer and healthcare distribution business
Li & Fung continues to simplify its overall business to focus on trading and logistics
Hong Kong, 3 May 2016 – Li & Fung Limited (“Li & Fung,” or “the Company;” SEHK: 494), the world’s leader in consumer goods design, development, sourcing and logistics, today announced it has signed a Sale and Purchase Agreement to sell its Asia consumer and healthcare distribution businesses (“LF Asia Distribution”) to Dah Chong Hong Holdings Limited (“DCH”) for an estimated cash consideration of US$350 million. The deal is expected to close by the end of June 2016.
The consumer and healthcare distribution businesses were acquired by Li & Fung through the privatization of Integrated Distribution Services Group Limited in 2010. The move to divest is part of Li & Fung’s Three-Year Plan (2014 – 2016) strategy of simplifying its overall business to drive organic growth and allows the Company to focus on its core businesses of trading and logistics.
William Fung, Group Chairman of Li & Fung, said, “We are very pleased to have reached this agreement with DCH. LF Asia Distribution has more than 40 years’ history and ranks amongst the leading consumer and healthcare distributors in Greater China and Southeast Asia. LF Asia Distribution complements the strengths of DCH and I believe this agreement will benefit both DCH and Li & Fung.”
Mr. Zhang Jijing, Chairman of DCH, commented, “We are very pleased to welcome LF Asia Distribution’s world-class people and experienced management team to DCH. Its business is highly complementary to our own and we look forward to working together as we grow our combined businesses.”
William Fung added, “Our distribution businesses have been an integral part of Li & Fung for the past five years and I am grateful to its management and employees for their dedication and hard work in this period.”
Under the terms of the agreement, DCH will acquire the fully operational business of LF Asia Distribution, which will continue to operate as a separate, independent entity for the first year and its employees will become employees of DCH upon closure.
The Agreement does not cover Li & Fung’s Logistics and Beauty businesses.