Li & Fung Ltd., the company's largest retail suppliers in Hong Kong, set aside HK $ 7 billion or equivalent to 901.06 million U.S. dollars for the acquisition. They will buy shares of Integrated Distribution Services Group Ltd.. (IDS), a company engaged in the same field from China.During this time, Li & Fung is only supplying to large retailers, like Wal-Mart Stores network. Through this acquisition, Li & Fung can expand its distribution network in China. This step could also boost its revenue contribution from China and Southeast Asian markets to be 12 percent.
President of Li & Fung Ltd., Bruce Rocowitz, said the revenue contribution from Asia has only reached 2 percent of total revenue last year. "Hence, we are also targeting the Japanese market," he added.
IDS has a network that reaches 150 cities and has 10 000 outlets across China. If this acquisition is smooth, Li & Fung got a splash of China net profit 30 million dollars, with total sales of 1.8 billion U.S. dollars.
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