Saturday September 21, 2019
SNc Channels:

Search
About Salem-News.com

 

Oct-23-2007 14:56printcomments

NIKE, Inc. Reaches Agreement to Acquire Umbro‏

Move significantly expands Nike's global leadership in football.

Nike logo
Nike headquarters are in Beaverton, Oregon

(BEAVERTON, Ore.) - (NYSE:NKE) announced Monday that it has reached agreement on an all-cash offer to acquire Umbro plc, a leading United Kingdom-based global football (soccer) brand with more than 70 years of experience in the world's No. 1 sport and the world's biggest football market.

The Board of Directors of Umbro plc, which is listed on the London Stock Exchange, has unanimously recommended that shareholders accept the offer of 193.06 pence, which together with the declared dividend values the company at approximately $582 million (285 million pounds sterling), or approximately $4.00 (195 pence) per share.

"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," said Nike, Inc. President and CEO Mark Parker. "With its close links to The Football Association and the England team, Umbro's future is even stronger than its past. This dynamic alignment of Umbro and Nike, with our complementary strengths and numerous ways to segment and grow the market, will lead the game at every level throughout the world. We are fully committed to helping Umbro reach its full potential, and we are delighted that Umbro's board is unanimous in its support of our offer."

The acquisition will significantly expand Nike's global leadership in football, a key growth category for the company. Since the early 1990s, Nike has grown its football revenues from about $40 million to approximately $1.5 billion and established brand leadership in the sport. Umbro sells products directly or through licensees in more than 90 countries and has sports marketing relationships with many top football players, teams and leagues, including the England national team. Umbro's 2006 annual revenues were approximately $276 million (149.5 million pounds). Umbro reports that if licensed sales were translated to direct sales based on wholesale cost, total wholesale equivalent sales were approximately $755 million (409.4 million pounds).

Commenting on the agreement, Umbro CEO Steve Makin said, "This is an excellent deal for all our stakeholders: it provides great value for shareholders and exciting prospects for our colleagues, partners and customers around the world. We will be a stronger and better business as part of Nike and this deal will allow us to accelerate our existing growth strategy by leveraging Nike's global resources and expertise. We look forward to taking Umbro to new levels with Nike's support."

Brian Barwick, CEO of The Football Association, said: "The FA has enjoyed an excellent partnership with Umbro for more than 20 years. 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. Nike has provided firm assurances that The FA relationship with Umbro will be protected and enhanced, and we look forward to working closely with both companies moving forward."

Nike intends to operate Umbro as a stand-alone affiliate brand, with a focus on accelerating the brand's existing growth strategy. Similar to other brands in Nike's portfolio, Umbro will benefit from Nike's product research, design and development expertise, and supply chain and distribution resources.

Umbro will join a strong and growing Nike portfolio of affiliate brands, including Converse, which was acquired by Nike in 2003, Cole Haan and Hurley International. Converse exemplifies Nike's track record of acquiring and growing complementary brands. Since acquiring Converse in 2003, revenue has grown at a compound rate of 22 percent, and in fiscal 2007 Converse revenues grew over 20 percent to surpass $550 million.

The brand has benefited from Nike product design and brand management expertise. Nike's portfolio of other businesses is contributing more than $2 billion in revenue today, and is targeted to contribute 25 percent of the company's revenue growth by fiscal 2011. To discuss these developments with analysts and investors, the company will hold a conference call Tuesday, October 24th at 3:00 PM ET.




Comments Leave a comment on this story.
Name:

All comments and messages are approved by people and self promotional links or unacceptable comments are denied.


[Return to Top]
©2019 Salem-News.com. All opinions expressed in this article are those of the author and do not necessarily reflect those of Salem-News.com.


Articles for October 22, 2007 | Articles for October 23, 2007 | Articles for October 24, 2007
The NAACP of the Willamette Valley

Tribute to Palestine and to the incredible courage, determination and struggle of the Palestinian People. ~Dom Martin

Special Section: Truth telling news about marijuana related issues and events.

Annual Hemp Festival & Event Calendar



Support
Salem-News.com: