Exporter Li & Fung has diversified its product range by acquiring a Hong Kong-based buying agent in a US$32 million deal.
The acquisition of Janco Overseas will give Li & Fung increased access to hard goods ranging from furniture, toys, houseware and sports goods to plumbing equipment.
With a solid profit record, Janco is expected to contribute about 8 per cent of Li & Fung's sales and an annual profit of HK$17 million, according to Li & Fung managing director William Fung Kwok-lun.
'We saw a very good, healthy company. A merger is for the benefit of both companies,' Mr Fung said.
Established 25 years ago in Hong Kong by American-Japanese Lester Kaneta, Janco sources hard goods from Asian markets such as the mainland, Taiwan, Singapore, Indonesia, Thailand, Pakistan and the Philippines for customers in the United States and Canada.
A major drawback of the acquisition is that Janco will not help Li & Fung reduce its reliance on the North American market, which is reeling from the economic slowdown.
'The acquisition fits three out of the group's four acquisition criteria,' Mr Fung said.