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Li & Fung Completes Privatization, Looks Toward ‘New Journey’

After 28 years on the Hong Kong Stock Exchange, sourcing giant Li & Fung has officially gone private as it moves toward what it says will be a new journey for the company.

Li & Fung shares were delisted Wednesday after losing more than 94 percent of their value since 2011. Hitting a 20-year peak of 20.74 Hong Kong dollars ($2.68) in January 2011, the supply chain management and logistics company’s shares last traded at 1.24 HKD ($0.16).

As a privately held company, Li & Fung will be managed by the Fung family and Singapore-headquartered global logistics warehouse operator and investor GLP Pte Ltd. The Fung family will retain a controlling share of the company with 60 percent of the voting shares.

“Today marks the start of a new journey for Li & Fung as we focus on achieving a fundamental transformation of our business,” Group CEO Spencer Fung said Wednesday. “While there will be challenges to manage, Li & Fung will benefit greatly from our partnership with GLP. Our commitment to our retail and supply-chain partners remains as strong as ever. Whether through our 50-country strong sourcing and production platform, industry leading digital product development or pan-Asian Logistics network, we continue to work closely with our partners to meet ever-changing consumer demands in a complex global environment.”

Li & Fung’s take-private price, according to the South China Morning Post, was “more than double the 50 Hong Kong cents that the stock last traded at before the offer’s announcement.” Payments to shareholders are expected to be dispatched on or before June 1.

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The privatization was prompted in part by Li & Fung’s fall from its perch as the leading middle man facilitating manufacturing and trade between factories in mainland China and brands and consumers around the world. As supply chains developed new demands and the value of the middleman waned, the company struggled to pivot, particularly as online shopping started to step into brick-and-mortar retail’s territory, and its volumes and profits took a hit.

The focus now, as it has been for the last few years—though strategies may be reshaped and reimagined in line with new demands brought on by the global pandemic—will be to create the digital supply chain of the future, a vision GLP co-founder and CEO Ming Mei says he shares.

“I am confident that with its commitment to long-term transformation, Li & Fung will build upon its position as the global retail supply chain leader,” he said. “I also look forward to exploring the areas where we can deepen our partnership and develop shared opportunities between logistics networks and technology innovation for our customers.”

Whether Li & Fung made its move too late or not, the 114-year-old company is now poised to put all of its efforts into a transformation it hopes will bring it up to speed to deliver on the modern supply chain’s new demands.

“We move forward with the next chapter of our transformation as a private business while maintaining our commitment to our staff, customers, suppliers, business partners, and the community of Hong Kong,” group chairman William Fung said.