Li & Fung sells three businesses for $1.1bn, shareholders to gain 50%
Li & Fung have promised their shareholders massive dividends this year after the sale of three businesses.
Li & Fung, which has been around since 1906, supplies high-volume time-sensitive consumer goods from Hong Kong and is a key part of the supply chain for many large western companies such as Wal-Mart.
It has now announced it is selling its furniture, jumpers and beauty businesses to a consortium for a total value of $1.1bn – and nearly 50% of this will go to shareholders.
The buyer is a consortium 45% owned by Hony Capital, a Chinese equity firm controlled by Legend Holdings.
Any proceeds not given out as dividends to Li & Fung’s shareholders will be ploughed back in to allow the company more “financial flexibility” in reaching its three-year goal of building an end-to-end digital supply chain.
Spencer Fung, CEO of Li & Fung, said about the deal: “It is a very strategic deal. The proceeds will low the company to continue the simplification of its business and execute out three-year plan. Our first half results were solid and customers and vendor partners are responding very positively to out new digital solutions. We are very excited to be creating a future supply chain that does not yet exist in the market.”