China’s Anta Sports has lodged a US$5.3 billion bid for Amer Sports, which owns Salomon, Wilson, Arc’teryx, Suunto, Peak Performance and Precor, among other brands.
Anta Sports has teamed with Hong Kong-headquartered private-equity group FountainVest partners in the bid, offering a 40 per cent premium over the target company’s share price before the bid was disclosed.
Amer Sports appeared somewhat taken aback by the bid, issuing a statement saying it was “not engaged in any negotiations with the consortium and has made no decisions in respect of the Indication of Interest”. The company noted the bid was conditional on 90 per cent shareholder approval, board approval, financing and other conditions.
“Amer Sports will release further information at an appropriate time if an agreement is reached with the consortium in respect of a transaction or any negotiations are terminated or abandoned.”
Anta Sports, listed on the Hong Kong stock exchange, was founded in 1991 as a manufacturing supplier to the footwear industry. Since then it has grown to become China’s largest domestic sportswear brand and industry analysts estimate it is the world’s third largest by market capitalisation after Nike and Adidas. Besides its own Anta-branded goods, it owns the rights to Fila in greater China and in 2016 formed a joint venture with Descente Japan and Itochu, which has resulted in the opening of 85 Descente stores in China and early last year another joint venture with South Korea’s Kolon Sport led to a network of 189 stores. Childrenswear business Kingkow followed last September, which now numbers 63 stores in Mainland China, Hong Kong, Macau and the US.
Sales last year grew 25.1 per cent to RMB16.69 billion (US$2.43 billion), following increases on 20 per cent in 2016 and 25 per cent in 2015. In the six months to June 30, year-on-year sales soared 44 per cent and profit by 34 per cent.
As of June, the company had 9650 retail stores in Mainland China.
In February, chairman and CEO Ding Shizhong said the company was actively seeking to buy “high-end international sportswear brands” with strong growth potential.
Amer Sports opportunity
Amer Sports posted sales last year of €2.69 billion ($3.12 billion) with 43 per cent of its revenue coming from Europe, Middle East and Africa and just 14 per cent from Asia. Sales in China have expanded from 1 per cent of total turnover in 2010 to 6 per cent this year and the company is eyeing 10 per cent within several years.
The company has recently been targeting growth in Mainland China and Anta Sports’ obvious market knowledge and footprint in the country would significantly boost those opportunities.
Amer’s fastest-growing division is softgoods, headed by the Salomon and Arc’Teryx brands.