Japanese textile giant Toray 60 billion yen to acquire 28% stake in Hong Kong Hutai Textile

According to insiders, Japanese textile manufacturer Toray Industries will acquire nearly 30% of the shares of Hong Kong's Pacific Textiles, and the two sides are now in the final stage of negotiations.

Hong Kong Mutual Textile will sell 405 million shares (equivalent to 28.03%) to Dongli at a price of HK$10 per share. Toray will invest 60 billion yen (about 3.6 billion yuan) for the company. After the completion of this transaction, Toray will become the largest shareholder of the company. Toray also plans to increase its shareholding to more than 50% next year, and will reintegrate it into a subsidiary.

At present, Toray has its own textile production and sewing factories in China and Southeast Asia. In addition to fabric development, the company also provides textiles and apparel for apparel and sportswear brands, such as the Japanese fast fashion brand Uniqlo. Toray and Uniqlo's parent company, Fast Retailing, have been cooperating for more than a decade, and the fabric business of the two companies is worth 850 billion yen. Toray hopes to cooperate with the company to create another similar business through the transaction, develop new knitted raw materials and sell them globally.

Founded in 1997, Mutual Textiles is the world's leading supplier of knitted fabrics, especially in the processing, dyeing and printing of knitted fabrics. Mutual Textile has factories in Guangdong and Sri Lanka, and its customers include Calvin Klein and many other large garment manufacturers, as well as sportswear manufacturers, swimwear and underwear manufacturers, such as Victoria's Secret, Mutual Textile or Uniqlo. Designated supplier of knitted fabrics.

Toray hopes to create a global network of high-performance fabrics, processing and sewing services through the customer base of the company. Mutual Textile will become a key subsidiary of the Toray Group and play a key role in the Group's expansion plan. Patrick Pun, CEO of Hong Kong Asia Fortune Securities, said: "Xiatai Textile has a large number of Japanese customers, and (Dongli) can use this acquisition to further expand its business in Japan."

In the last fiscal year ending March this year, the sales of the company were HK$5.993 billion and the net profit was HK$989 million. As of July 3, the share price of the company was up 9.87% to the highest point in eight months: 9.9 Hong Kong dollars / share, closed on Monday, slightly down to 9.51 Hong Kong dollars / share. The transaction is expected to be completed in mid-July.