Li&Fung announces divestment of Asia Consumer and Health Distribution Business

Li&Fung announces divestment of Asia Consumer and Health Distribution Business

The  Company  has  announced  earlier  that  it  was  evaluating  strategic  alternativeswith respect to its Asia consumer and healthcare distribution businesses which were acquired by the   Company through the privatization of Integrated  Distribution Services   Group   Limited in 2010. Since their acquisition, these distribution businesses have been operated as part of the Group’s trading network, which is distinct from the Group’s logistics network. As these distribution businesses are not part of the  core sourcing and logistics business of the Group, the Directors determined it is in the best interests of the Company to divest these businesses

The Company, and the Seller (a  wholly  owned  subsidiary of the Company)  have entered  into the Sale and Purchase  Agreement with Dah  Chong Hong Holdings Limited (“DCH”) and Neosota Corp. (being a wholly owned subsidiary of DCH), in order to dispose of the Distribution Business, and for a cash consideration of USD 350 million (on a cash-free and debt-free basis, and is subject to closing adjustments).

The Directors are of the view that the divestment of the Distribution Business is part of the  Group’s strategic  objective to allow the Group to  continue to focus  its resources on its  core trading  and logistics  business.  This strategic transaction also has the added advantage of reinforcing the Group’s strong cash flow and solid balance sheet with increased flexibility in its capital structure.

Listing rules implications: As the highest applicable percentage ratio for the Company in respect of the divestment  is  5 % or more, but is less than 25 %, the divestment constitutes a discloseable transaction for the  Company, and it is subject to the announcement requirement under Chapter 14 of the Listing Rules.

Shareholders and potential investors of the Company should note that the Divestment is subject to a number of Conditions which may or may not be fulfilled.

Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

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