According to a company spokesperson, Hony Capital and the Fung Group are expected to acquire three of Li & Fung’s product verticals: furniture, sweaters and beauty. Subject to the approval of independent shareholders, the transaction is anticipated to close in the first half of next year.
Notably, the move will help the company build what the spokesperson described as “the supply chain of the future.” Spencer Fung, group CEO of Li & Fung, explained that selling off the product verticals will strengthen the company.
“The strategic divestment of the product verticals allows Li & Fung to focus on its core competencies and further strengthens our capital structure. The $1.1 billion proceeds will allow us to pay a generous dividend to our shareholders, and the remaining $580 million of cash will give us more financial flexibility as we continue to execute our three-year plan goal of building an end-to-end digital supply chain,” he said. “Our first-half results were solid, and our customers and vendor partners are responding very positively to our new digital solutions. We are creating a future supply chain that does not yet exist in the market.”
Chairman and CEO of Hony Capital and EVP of Legend Holdings John Zhao also weighed in. “We look forward to working with the management teams of the product verticals to sharpen their distinct strategies. With our value-added services, future success lies in going deeper into their respective product categories,” he said.
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