JINING, China--(BUSINESS WIRE)--Israeli men’s clothing manufacturer Bagir Group plans to sue Ruyi Group because Ruyi has not delivered the remaining payment of about USD 10 million.
The Bagir Group, an Israeli menswear group founded in 1961, produces 3 million garments a year. On November 23, 2017, Ruyi Group announced its intention to acquire 54% of Bagir Group Ltd. (BAGR.L) for USD 16.5 million, or approximately GBP 12.4 million, to become Bagir’s controlling shareholder. Ruyi Group was then undertaking global expansion and acquiring well-known fashion brands to build a Chinese version of global fashion industry group. The acquisition of Bagir is to transfer part of the processing and manufacturing capacity and improve the global layout.
Bagir Group has stated that Ruyi Group’s acquisition provided Bagir with important business opportunities to expand Bagir’s suit pants production in Ethiopia and establish the production of jacket products. Stimulated by the acquisition news, Bagir Group’s stock rose sharply.
Speaking of the postponed deal, Ruyi Group spokesman Chris Chen explained that the acquisition plan was originally scheduled to be completed by the end of 2018 but had to be postponed to May 2019, as the Chinese government was taking more time to review the deal. Since 2019, the textile and apparel industry has faced great uncertainty under the impact of the Sino-US trade war. Simultaneously, the operation of Bagir Group in recent years has not improved as promised before the acquisition, and its Ethiopian factory has not attained the production goal by 2018. Ruyi Group and Bagir Group had negotiated to delay the settlement day.
Chris Chen said, “Ruyi Group is conducting friendly negotiations with Bagir to properly resolve the acquisition issue and ensure that both parties’ benefits are fully protected.”
Since 2010, Ruyi Group has successively acquired international brands such as Japan's Renown Group (3606.T), British fashion brand Aquascutum, French luxury fashion brand SMCP Group (SMCP.PA) and Hong Kong's Trinity Group (0891.HK). These acquisitions have demonstrated Ruyi’s determination to enter the fashion field from manufacturing. Even though the acquisition of Bagir has encountered some setbacks, Ruyi still firmly believes in the transformation to the high-end fashion industry. The follow-up issues are still under negotiation.