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Belle International to buy Big Step
Mar '12
The board of directors of Belle International Holdings Limited, announces that Synergy Eagle Limited (as the buyer), a direct wholly-owned subsidiary of the Company, and, inter alia, an independent third party to the Company (as the seller) entered into a share purchase agreement pursuant to which the Seller has agreed to sell to the Buyer the entire equity interest in Big Step Limited (the “Target Company”, together with its subsidiaries, the “Target Group”).

The Target Group is principally engaged in the sales and distribution of sportswear products and operates approximately 600 self-managed retail outlets in certain cities of various provinces of the PRC. The products sold by the Target Group are mainly under the brands of Nike and Adidas, which are generally in line with the existing business of the Group.

The major terms of the Agreement are as below:

Date of the Agreement: 20 March 2012

Consideration: The consideration for the acquisition of the Target Company payable by the Buyer to the Seller is RMB880,000,000 (subject to adjustments with a maximum cap of RMB920,000,000) (the “Consideration”), which will be satisfied by the Buyer in the following manner:
1) RMB264,000,000, being 30% of the Consideration payable within 15 business days from the date of the Agreement (the “Deposit”);
2) RMB528,000,000, being 60% of the Consideration payable at completion (“Completion”); and
3) RMB88,000,000, being 10% of the Consideration payable after the last day of the period from the date of Completion (the “Completion Date”) up to (and including) the end of the 18th month thereafter.

The Consideration may be adjusted with reference to the net assets of the Target Group as at the Completion Date.

The acquisition of the Target Group (the “Acquisition”) is primarily based on the following factors:

1) the Target Group has a leading market position in certain areas in the PRC and the company considers that the Acquisition could strategically strengthen the group's geographical presence in certain areas in the PRC;
2) costs of supply are expected to be lower for the Target Group after acquisition given that the nature of the business of the Target Group is in line with that of the group, thereby achieving economies of scale and synergy based on the existing platform maintained by the group; and
3) the overall operational efficiency of the Target Group is expected to be improved after the company introduces its existing management system to the Target Group.

The Directors, including the Independent Non-executive Directors, consider that the terms of the Agreement are on normal commercial terms which are fair and reasonable and the entering of the Agreement is in the best interests of the company and the shareholders of the Company (the “Shareholders”) as a whole.

Belle's business is broadly divided into two main segments – the footwear business and the sportswear business.

Belle International Holdings Limited

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