Li & Fung to sell Asia distribution assets to Dah Chong Hong for US$350m
[HONG KONG] Global exporter Li & Fung is selling its Asia consumer and healthcare distribution business to motor vehicle distributor Dah Chong Hong Holdings for US$350 million in cash, as it refocuses on core trading and logistics operations.
The supplier to US retailers including Wal-Mart and Kohl's Corp is selling the LF Asia Distribution business to Dah Chong in a deal that is expected to close by the end of June, Li & Fung said on Tuesday. The deal does not cover Li & Fung's logistics and beauty businesses.
The LF Asia Distribution business came into Li & Fung's fold when it bought Integrated Distribution Services Group in 2010. The Hong Kong-based group has changed its strategy since 2014 to focus on its core asset-light supply-chain business.
For Dah Chong Hong, the deal represents expansion of its consumer-focused operations.
"The company believes that the acquisition will expand the company's consumer business, creating a better balance between motor and consumer products," Dah Chong Hong Chairman Zhang Jijing said in a statement, adding the enlarged consumer products portfolio will boast a broad range of food, personal care and healthcare brands.
Li & Fung had said in April it was in talks with independent third parties regarding a "possible transaction" involving the consumer and healthcare distribution business.
Li & Fung shares fell 1.3 per cent on Tuesday, while Dah Chong Hong stocks rose 2.2 per cent. The moves compared to a 1.9 per cent fall in the benchmark Hang Seng Index.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Consumer & Healthcare
HCA beats first-quarter profit estimates on higher patient admissions
US FDA approves Pfizer’s gene therapy for rare bleeding disorder
EU toughens rules on Chinese fashion retailer Shein
Best World under fire from shareholders at AGM over dividends, director salaries
‘Extreme’ climate blamed for world’s worst wine harvest in 62 years
Sheng Siong Q1 net profit up 9.3% on higher revenue