Li & Fung to take IDS private in a $901-mn deal

Li & Fung, the consumer goods sourcing company, a supplier to Wal-Mart Stores, today offered to take Integrated Distribution Services Group (IDS) private for HK$7 billion ($901 million) in order to expand its business into mainland China.

The Fung family of Hong Kong-based Li & Fung, which holds a 32.96-per cent stake in IDS has offered HK$21, or 0.585 of its stock, for each share in logistics firm IDS, according to a filing with the Hong Kong stock exchange.

Li & Fung Group and the Fung family jointly own about 45 per cent of IDS.

The IDS Group, part of the Li & Fung Group, where Li & Fung Group along with the Fung family jointly own 44.94 per cent, is a leading integrated distribution and logistics services provider specialising in value-chain logistics with extensive networks in China, ASEAN, the US and the UK.

Headquartered in Hong Kong, the $1.8 billion turnover IDS provides integrated-distribution services covering logistics, distribution, manufacturing and international.

IDS currently has over 400 customers including many blue-chip multinationals from a wide spectrum of industries including consumer, healthcare, retail, footwear and apparel and garment.

Founded in Guangzhou in 1906, Li & Fung Group is a multinational group of companies operating in three distinct core businesses - export sourcing through Li & Fung Limited, distribution through IDS and retailing through Convenience Retail Asia Limited, Trinity Limited and other privately-held entities.

The Li & Fung Group has a total staff of over 35,000 across 40 economies worldwide and reported revenues of $16.7 billion for 2008.

Li & Fung, the biggest supplier of apparel and toys to Wal-Mart Stores, generates most of its revenue from the US and Europe, will gain entry into Asia, especially China, where IDS has majority of its clients.