Ningxia Zhongyin Cashmere Co Ltd announced in a report that it had inked a framework agreement with UK’s 140-year cotton mill, Dawson International PLC, to acquire its subsidiary Todd & Duncan’s business and assets.
News regarding this acquisition was first published on January 19th.
"Lower price is one of the reasons to acquire the foreign asset amid the current global economic downturn", spokesman of Zhongyin Cashmere Group told Shanghai Securities Journal, "The final result will be decided by overall investigations and negotiations."
Headquartered in Lingwu, Niagxia Hui Autonomous Region, Zhongyin Cashmere is engaged in the production and sale of cashmere, cashmere tops, cashmere yarns, and cashmere sweaters. It gained net profits of 17.7023 million yuan in the first three quarters of 2008 and expected not less than 31 million yuan in the full year.
Todd & Duncan, the top cashmere and yarn manufacturer in the UK, manufactured 300 tons of cashmere yarn and had net operating assets of ?17.5 million in 2007. "Having this sort of Scottish company with many high-end clients will improve our image of overall business and allows us an entry into the UK and Europe", said the spokesman for Zhongyin.
Nonetheless, the group’s acquisition scheme is far from the end. According to sources, earlier this year Zhongyin called off talks to acquire the whole of the Dawson International Group and to focus on cashmere manufacturing market.
Its acquisition plan is divided into three stages, moving Dawson’s production equipment to Ningxia, introducing senior staff to Zhongyin, and finally solving the problem of brand ownership.
Now the group has started the first step, although there is still a great deal of uncertainty with the ongoing overall investigation and negotiations.
