Japanese sportswear and accessories company Descente Ltd. announced in a notice to shareholders that it has increased its stake in Le Coq Sportif (Ningbo) Co. Ltd. (NLCS). NLCS was established by Sugiei and Itochu Textile (China) Co., Ltd. (ITS), a subsidiary of Itochu Corporation, in 2004 to expand the brand’s presence in the Chinese market. Prior to the recent transaction, NLCS was 40 percent owned by Descente, 10 percent owned by ITS and 50 percent owned by joint venture partner Zhejiang Trade Zone Sheng Rong Clothing Co., Ltd.
According to Descente’s announcement on Aug. 10, the Japanese company has acquired Sugiei’s entire stake in NLCS, while also conducting a recapitalization to assume the equity financing of NLCS shareholders by ITS. After the recapitalization, the share capital of NLCS is more than 10/100 of the company’s share capital, so NLCS will be classified as a specified subsidiary. The ownership after the recapitalization will be 75 percent for Descente and 25 percent for ITS.
The acquisition is valued at approximately 3.55 billion yen (€25.9 million) and is expected to close in October.
