Prime Tanning and Shanghai Richina Leather announce merger

Prime Tanning and Shanghai Richina Leather Co., Ltd announced the planned merger of the two companies to form the world's largest premium leather maker, Prime Leather International. Prime currently operates the largest vertically integrated wet blue and side-leather finishing tanneries in North America, and sells its finished leather to footwear, handbag, upholstery, and specialty markets worldwide, and the U.S. military. SRL finishes leather at its large facility in Shanghai, which it sells to the shoe, garment, and automotive leather markets. Both companies supply the world's best brands. The combined company will have capacity to finish over 150 million feet of leather annually. Robert Moore, current CEO of Prime, will become CEO of the new company, and the board of directors will be comprised of representatives of both companies. The combination will be structured as a three-step process. First, the two companies will execute a management agreement that will combine on May 1, 2008 their global management, marketing, sales, and customer service teams into one entity so they can deliver significant synergies to their global customer base immediately. Second, Prime and SRL will legally combine the balance of their operations through a merger or contribution agreement as soon as possible. Third, the combined entity will seek a listing on an Asian stock exchange at the earliest possible time according to market conditions. Prime's CEO Robert Moore commented, "The merger of Prime and SRL will be a landmark transaction combining the enormous production And technological synergies of the two companies for the benefit of our global customer base. This transaction will enable us to serve the global needs of customers by integrating our R&D and manufacturing platforms on a worldwide basis. We will maintain Prime's unsurpassed standards for product innovation, quality and environmental stewardship." SRL's CEO Roger Wang stated, "SRL has been working closely with Prime since Prime became our principal wet blue supplier in early 2006. We have gotten to know the Prime team and value the strong synergies between us. This merger will create the undisputed global leader in premium bovine fashion leathers for the footwear and specialty markets, while significantly strengthening our capabilities in our lambskin garment and automotive leather divisions. We look forward to integrating our global sales and marketing, technical, and production teams for the benefit of our customers worldwide."