China Dealmaker Pays Koch Industries $2 Billion for Lycra Empire

(Bloomberg) -- China’s Shandong Ruyi Group is paying more than $2 billion to buy the owner of Lycra, the form-fitting elastic material used in everything from skinny jeans to yoga pants, people with knowledge of the matter said. 

The purchase from Koch Industries Inc. is part of the Chinese apparel producer’s goal to acquire leading global textile brands, one of the people said, asking not to be identified because the information is private. Shandong Ruyi Group announced Oct. 28 it will buy the Apparel & Advanced Textiles business of Invista, a subsidiary of Wichita, Kansas-based Koch Industries, for an undisclosed price. 

Shandong Ruyi is adding about 3,000 employees through the deal, which brings it brands including Lycra and Coolmax fibers and Thermolite insulation as well as manufacturing facilities, research centers and sales offices around the globe. It continues to pursue acquisitions even as other Chinese companies have slowed dealmaking in the U.S., with announced purchases falling 78 percent this year to $15.7 billion, data compiled by Bloomberg show.

Lycra is the brand name of the original spandex fiber, a man-made material also known as elastane that was invented in 1958, according to Invista’s website. It was initially used as a rubber replacement and now comes in more than 200 varieties used in products including socks, swimwear, lingerie and activewear.

Invista, which is ultimately controlled by billionaire brothers Charles and David Koch, expects to close the sale by the middle of 2018, according to the company’s earlier statement. Representatives for Shandong Ruyi and Invista declined to comment.

Shandong Ruyi already controls French fashion retailer SMCP and British trench coat maker Aquascutum. The company is also pursuing an investment in Trinity Ltd., the billionaire-backed owner of bespoke suit maker Gieves & Hawkes.

To contact the reporters on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net, Devin Banerjee in New York at dbanerjee2@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Elizabeth Fournier at efournier5@bloomberg.net, Timothy Sifert, Michael Patterson

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