Luen Thai Holdings Ltd. said it entered into an agreement to acquire a 100 percent stake in Universal Elite Holdings Limited — known in the market as the “Universal Group.” Terms of the deal were not disclosed, and the acquisition is subject to “customary conditions” for it to fully close.
The acquisition follows Luen Thai’s implementation of a sustainability strategic plan aimed at creating “smart factories” where goods are made in a way that is informed by data and driven by information technology, and which is executed by manufacturing production that is close to the markets served.
As a result of the acquisition, Luen Thai’s accessories division “will become one of the leading manufacturers in the handbags/SLG [small leather goods] market with 30,000 employees.” Additionally, the companies said the deal positions Luen Thai as the only handbags/SLG manufacturer “with production facilities in four GSP [Generalized System of Preferences] countries [duty-free to the U.S.A and E.U.], namely, Cambodia, Myanmar, the Philippines and Thailand.” GSP allows for duty-free treatment of various goods to specific beneficiary countries and regions.
“On behalf of the board and management team of Luen Thai, we welcome the joining of Universal Group and its team to our Luen Thai family”, said Raymond Tan, chief executive officer of Luen Thai. Tan said that with Universal Group under its wing, the company can be “further strengthened in our capability of product development and gain two important GSP countries manufacturing capacity offering additional duty-free benefit to our strategic customers.”
Eric Chu, president of Universal Group, will continue to lead the company, which will be operated as a “strategic business unit” of Luen Thai. Chu said he was “confident that Universal Group can be further elevated to the next level with the support of Luen Thai in finance, human resources and technology.”
Universal Group was founded in 1972 and is headquartered in Hong Kong. The company is engaged in the manufacturing of handbags and small leather goods aimed at the affordable luxury market. The company’s facilities are located in Myanmar, Thailand and China, and it has 10,000 employees.
Luen Thai positions itself as a leading fashion and lifestyle apparel and accessories supplier. With this deal, the number of employees rises to 50,000 and its manufacturing will be now based in seven countries: Cambodia, China, Indonesia, Myanmar, the Philippines, Thailand and Vietnam.