Nike buys Umbro for $580 m

Source: Exec Digital USA

Date :23/10/2007 12:22:46

Nike Plc, the world's largest maker of athletic shoes and clothing, has agreed to buy soccer-kit maker Umbro Plc for $580 million.

Manchester-based Umbro who own 1,820 stores in the U.K. supplies the national soccer teams of Ireland, Sweden and Norway as well as six FA Premier League teams and more than 100 other professional teams globally as well as England.

Nike has been expanding aggressively into the football market over the past few years, raising sales to $1.5 billion.

The takeover which has been endorsed by the FA, will give Nike a huge position in the Premier League, gaining the contract to outfit the English soccer team and sell replica jerseys worldwide.

It already backs Manchester United and Arsenal, as well as leading European teams such as Barcelona.

Developing brands

Umbro chief executive Steve Makin said: "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."

He added that Umbro hoped to benefit from Nike's brand-making and research and development expertise, while Nike was gaining an "authentic" football brand.

The acquisition-which is Nike's first since the 2004 purchase of Official Starter Properties LLC for $43 million-will increase Beaverton, Oregon-based Nike's sales of soccer apparel by about ten percent to $3.4 billion.

Nike said that its 2003 acquisition of Converse was a good indicator of how brands could benefit from its marketing expertise, product design and operations with Converse generating a 22 percent growth rate.

Sports Direct who has a 15 percent stake in Umbro was initially tipped as the potential buyer.

October 23 2007

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