Ruyi plans to buy UK trench coat maker for $120 million

Shandong Ruyi Group plans to acquire iconic British trench coat maker Aquascutum for about $120 million, sources said, as Chinese companies extend a record overseas dealmaking spree.

The Chinese mainland textile producer, which bought control of French fashion group SMCP earlier this year, plans to buy the Aquascutum business from Hong Kong-listed YGM Trading Ltd and is conducting due diligence, according to the sources.

Ruyi hopes to reach a final agreement in the next few weeks, one the sources said.

Ruyi joins Fosun International Ltd and Qingdao Haier Co in seeking to acquire foreign consumer brands that can be marketed to increasingly affluent Chinese shoppers. Chinese companies have announced $50.2 billion in overseas consumer acquisitions this year, up from $24.3 billion during the same period in 2015.

Shares of YGM Trading, which also distributes the Ashworth line of golf apparel, have risen 46 percent this year, giving the company a market value of $156 million.

YGM Trading said in an Oct 17 exchange filing it had signed a memorandum of understanding to sell its Aquascutum brand business for about $120 million, without naming the buyers.

There’s no certainty the deliberations will result in a transaction, the sources said. A representative for YGM Trading said she could not immediately comment. A person who answered the phone at Ruyi’s headquarters said nobody was available to answer queries.

Aquascutum was founded in 1851 in London by tailor John Emary, who invented a rain-repellent fabric.

The company’s trench coats, developed for use by the British military, were later worn by UK former prime minister Margaret Thatcher and US movie star Humphrey Bogart, according to Aquascutum’s website. YGM Trading became the global owner of the brand in 2012.

Ruyi bought control of SMCP, the French fashion group, from private equity firm KKR & Co earlier this year. The Chinese textile producer has also invested in clothing companies including Tokyo-based Renown Inc.

JOEL RYAN / AP Models have makeup applied before they display products for fashion house Aquascutum at London Fashion Week.