Li & Fung sells non-core distribution business

The supply chain manager responded to calls to focus on its core businesses, selling a healthcare and consumer arm for $350m to conglomerate Dah Chong Hong.

Global sourcing giant Li Fung got a shot of extra cash this week, selling its Asia consumer and healthcare distribution business to conglomerate Dah Chong Hong in a deal worth $350 million.

The Hong Kong-based supply chain manager, which sources products for big retailers like Walmart and Target, has been under pressure to offload its noncore assets. Li Fung's Hong Kong-traded shares have fallen just under 40% in the past year amid sluggish top-line growth and weak operating results.

In that context, the deal appears to make sense. Selling non-core businesses would allow Li Fung to concentrate efforts on its sourcing and logistics franchise, as well as...

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