Runs in the family

15 December 2017 By Jeffrey Goldfarb Follow @jgfarb

The Hong Kong conglomerate is offloading its struggling knitwear, furniture and beauty products divisions for $1.1 bln. Buying them for a healthy price is a group led by the Fung clan. A company dividend will return some proceeds to them. It’s a cozy solution to a prickly problem.

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Li & Fung revival depends on more than split

Context News

Li & Fung, the Hong Kong trading conglomerate, said on Dec. 14 it would sell its furniture, sweaters and beauty products businesses to the company's founding family and a private equity firm for $1.1 billion in cash.

The board said it plans to use some of the proceeds to pay a special dividend of $520 million.

Under terms of the deal, Hony Capital will own 45 percent of the products divested, while Fung Holdings will take a 45 percent stake and Fung Investments will hold the remaining 10 percent.

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