Li & Fung Said to Consider Sale of Asian Distribution Unit
Li & Fung has been talking with potential buyers for the business, which distributes consumer and health-care products in greater China and Southeast Asia, one of the people said. A deal could value LF Asia at $300 million to $400 million, according to the people, who asked not to be identified because the information is private.
The unit being sold represents Li & Fung’s remaining distribution business after it spun off Global Brands Group Holding Ltd., which licenses brands like Juicy Couture and Jones New York, as a separate listed company in July 2014. LF Asia distributes consumer goods including Coty Inc. cosmetics, Procter & Gamble Co. personal-care products and Sanofi medications.
Li & Fung hasn’t made a final decision on the sale, and there’s no certainty deliberations will result in a deal, according to the people. The company said in a filling with the Hong Kong stock exchange Wednesday that it is evaluating strategic alternatives and is in discussions with third parties regarding its Asia consumer and health-care distribution businesses.
Shares of Li & Fung have fallen 7.8 percent this year, giving it a market value of about $5.3 billion. The company, controlled by billionaire brothers Victor and William Fung, said in its latest earnings statement the Asian distribution business suffered last year from China’s economic slowdown, geopolitical issues in Southeast Asia and Asian currencies’ depreciation against the U.S. dollar.