From Home Furnishing Business
Li & Fung Sells Furniture Holdings to Private Equity Firm
Li & Fung, the Hong Kong-based supply chain giant, said it is selling its furniture businesses as part of a $1.1 billion deal with Chinese private equity firm Hony Capital.
The transaction, which also includes Li & Fung’s sweaters and beauty businesses, will allow the company to concentrate on its logistics and supply chain businesses, the company said.
Li & Fung’s furniture holdings include California-based case good resource Whalen Furniture.
“The strategic divestment of the product verticals allows Li & Fung to focus on its core competencies and further strengthens our capital structure,” said Spencer Fung, group CEO. “The US$1.1 billion proceeds will allow us to pay a generous dividend to our shareholders and the remaining US$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.”
The transaction, which must be approved by shareholders, is expected to close in the first half of 2018. It follows the spin-off of Global Brands in 2014 and the divestment of the Asia Consumer & Healthcare distribution business in 2016.