- Sale to close end-June as part of move to simplify business
- Citic's DCH says purchase meant to balance its products
Li & Fung Ltd., the sourcing company that supplies clothes and toys to U.S. retailers such as Wal-Mart Stores Inc., said it agreed to sell its distribution unit LF Asia to Dah Chong Hong Holdings Ltd. for about $350 million in order to simplify its businesses and focus on trading and logistics.
The deal is expected to close by the end of June, and the proceeds will be used for working capital and to strengthen its capital structure, Li & Fung said in a statement Tuesday. Hong Kong-based Li & Fung has been talking with potential buyers for the business, Bloomberg News reported last month.
Dah Chong Hong, or DCH, a cars to food and logistics conglomerate that’s a majority-owned subsidiary of CITIC Ltd., said in a separate statement the acquisition of LF Asia will expand its own consumer business and create a better balance between its motor and consumer products. LF Asia distributes consumer and health-care products across Asia.