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Nike and Umbro agree deal
Sports giant Nike recently agreed a deal to buy British brand Umbro which will give shareholders just over 193 pence per share.
The deal values Umbro at £285million and the offer represents a 61 per cent premium on the last business day of trading before the approach was made public. Shares stood at 120 pence each on October 17.
Umbro supplies the England football team's kit along with six Premiership clubs (Birmingham City, Blackburn Rovers, Everton, Sunderland, West Ham and Wigan Ahtletic) and 100+ clubs worldwide (including Rangers and Hearts in Scotland), as well as being endorsed by high-profile players Michael Owen, John Terry and Barcelona's Deco.
Nike has moved to assure the Football Association that the move will not jeopardise Umbro's relationship with the FA. Quoted by the BBC, FA Chief Executive Brian Barwick stated: "We are delighted that the proposed acquisition will allow us to continue our strong historical relationship with Umbro while benefiting from the marketing expertise and financial strength of Nike."
Explaining its motives in the offer document, Nike opined that Umbro is a "world class, authentic football brand with well-established positions in key growth markets and a deep football heritage."
Shortly before the move, JJB Sports snapped up a 10.1 per cent stake in Umbro, apparently to safeguard its future England shirt market as Sports Direct International (owners of Sports World) already owned 15 per cent of Umbro's shares.
Nike entered the football market in the early 1990s, growing from $40million of the company's revenue to $1.5billion in recent years.
As for what this means for the independent going forward after the agreement is inked in the new year, watch this space.
