BEAVERTON, Oregon: U.S. sportswear major Nike Inc. announced Tuesday it has reached a 285-million-pound all-cash deal to acquire British firm Umbro Plc. Umbro is a global soccer brand with more than 70 years of experience in sports and football market. The company is listed on the London Stock Exchange.
Manchester-based Umbro's board has unanimously recommended the deal to the shareholders of the company. The deal envisages a price of 193.06 pence to a share of the company.
President and CEO of Nike Mark Parker said Umbro is a brand with a "powerful heritage and deep experience in the world's most popular sport and the world's biggest football market." Umbro provides the kit for the England team and supplies kits for six Premier League clubs.
Nike has assured Britain's Football Association it will protect Umbro's relations with the association.
Nike said in a press statement the acquisition will significantly expand its global leadership in football, a key growth category for the company. The company has increased its football revenue since the early 1990s from about $40 million to approximately $1.5 billion and established brand leadership in the sport.
Umbro has a market that spans some 90 countries and it sells its products directly or through licensees. It caters to several top football players, teams and leagues.
As speculation about Umbro being a target of acquisition, retailer JJB Sports had bought a 10.1% stake in the company. Another retailer, Sports Directs, already holds a 15% stake in Umbro. It is not clear whether these two stakeholders would support the deal, though Nike is known to have contacted the two firms.
Umbro's chief executive Steve Makin described the offer as an "excellent deal" for shareholders. He said the company will be a stronger and better business as part of Nike and the deal will allow it to accelerate its existing growth strategy by leveraging Nike's global resources and expertise.
The offer price constitutes a 61 per cent premium on the 120 pence-a-share price that prevailed on 17 October, the day before Umbro said it had received an approach from Nike.
Umbro had annual revenues of 149.5 million pounds in 2006 .
Prior to Umbro acquisition, Nike has already got into its stable brands like Converse, which it acquired in 2003, Cole Haan and Hurley International.
