Nike Reaches Deal To Acquire Int'l Soccer Stalwart Umbro
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Nike Reaches Deal For An All-Cash
Offer Of About $582M For Umbro |
Nike has reached a deal for an all-cash offer of about US$582M to acquire U.K.-based Umbro, whose BOD unanimously recommended that shareholders accept the offer. Nike intends to operate Umbro as a stand-alone affiliate brand (Nike). The FINANCIAL TIMES’ Tom Griggs writes the deal is the “latest move in [Nike’s] stated mission to become the leading global [soccer] brand before the 2010 World Cup, trying to fight off tough competition from adidas.” adidas did not bid on Umbro (FINANCIAL TIMES, 10/23). BLOOMBERG NEWS’ Loveday Morris notes the acquisition of Umbro will increase Nike's soccer apparel sales by around 10% to $3.4B. Umbro has 1,820 global retail outlets and is planning to open 700 more. Umbro had an agreement to supply uniforms to the English national team through 2014, and England's Football Association must approve "any new owner of the rights." Nike VP/Europe, Middle East & Africa Eunan McLaughlin said that Nike has signed a “long-term” shirt contract with the FA. Umbro also supplies uniforms to six teams in England’s Premier League (BLOOMBERG NEWS, 10/23). In endorsing the Nike/Umbro merger, the FA said it would “continue our strong historical relationship with Umbro while benefiting from the marketing expertise and financial strength of Nike” (London TELEGRAPH, 10/23).
NO CORPORATE SHAKE-UP EXPECTED: In London, Leroux, Butler & Kennedy write Nigel Doughty, who has been Umbro Chair since '99, "is expected to leave" the company. Umbro CEO Steve Makin said that Umbro "would retain separate" HQs from Nike and that he "did not expect any management changes" (LONDON TIMES, 10/23).
DONE DEAL? In Manchester, Graeme Wearden reports Nike still faces “the prospect of complicated negotiations” with JJB Sports and Mike Ashley's Sports Direct Int’l, which “have both recently acquired significant stakes” in Umbro. Sports Direct “had been seen as a potential bidder for Umbro, having raised its stake to 15%” (Manchester GUARDIAN, 10/23).
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