Hong Kong, 31 October 2001 - Li & Fung Limited [SEHK: 0494] today signed a Memorandum of Understanding with Japanese trading firm Nichimen Corporation in connection with a possible business alliance. While the MoU is non-binding, the two companies are in active negotiation with a view to reaching a formal agreement regarding the alliance.
With an annual turnover of US$19.5 billion, Nichimen is publicly listed in Japan and is one of the country's leading general trading firms, traditionally focusing on importing and exporting products such as textile goods, lumber, metals, machinery, fuel, chemical products and food. In recent years, Nichimen has placed stronger emphasis on developing its textile and apparel business in Japan.
Given Li & Fung's well-established global sourcing network and Nichimen's customer servicing capabilities, the alliance under negotiation is expected to generate high value for retailers in Japan. It is also likely that Li & Fung would as a result enjoy a stronger presence, especially in the apparel and home improvement products sectors, in the Japanese market that would be conducive to its long-term growth prospects.
The two companies had also entered into separate agreements for cross-shareholding whereby Li & Fung had agreed to issue 4.6 million new shares to Nichimen, and also to purchase 4 million existing outstanding shares of Nichimen. The value of the shares involved will amount to approximately US$4.4 million for each party.
Commenting on the potential alliance, Mr. William Fung, Group Managing Director of Li & Fung Limited, said, "We are glad to be working on this business alliance with Nichimen. We believe the synergy that results will be mutually rewarding. The cross shareholding arrangement is a customary practice in dealing with Japanese customers and an indication of both sides' sincerity and commitment to this alliance."
Mr. Fung also disclosed that the two parties were aiming at concluding a formal agreement by the end of this year.
About Li & Fung Limited
Li & Fung Limited is today one of the premier global consumer products export trading companies managing the supply chain for high-volume, time-sensitive consumer goods, including garments, fashion accessories, toys and games, sporting goods, furnishings, handicrafts, shoes, travel goods and tableware. These goods are sourced through a network of offices in 37 countries for customers in the US, Europe and Asia. (Corporate Web site: www.lifung.com)
About Nichimen Corporation
Established in 1892, Nichimen Corporation is one of Japan's leading general trading companies, with net sales in the fiscal year ended March 31, 2001 totaling US$19.5 billion and is now engaged in a diverse range of activities including trading, financing, and investment. Products traded include various types of plastics, chemicals, energy, textiles, foodstuffs, condominium units, forest products, general merchandise, machinery, metals and other merchandise.
| For further information: | |
| Scotchbrook-BSMG Worldwide (Hong Kong) Ltd | Telephone: 2877 3939 |
| Fannie Mok | Direct line: 2863 9119 |
| Carson Chan | Direct line: 2863 9117 |
| © Copyright 1996-2008 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |