Chinese megadeal in sporting goods

The leading Chinese sporting goods brand Anta Sports (FY2018 rev: €545m, rising 44% YoY) acquires the giant Finnish sports equipment maker Amer Sports (FY2018 rev: €2,7bn), in a deal valued at c. €4.6bn. This transaction is backed by an international buyout consortium and is expected to be completed by Q2/2019. Under the deal, Anta acquires 58% of Amer, while other investors in the consortium are reported to include the Hong Kong-based private equity fund FountainVest (21.3%) and the Canadian billionaire Chip Wilson, founder of yoga apparel company Lululemon (20.6%).

Amer Sports: A Finnish sporting goods company listed on the Nasdaq Helsinki stock exchange with a number of leading brands, including Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor. Founded in 1950, the company began life as a tobacco manufacturer & distributor, but has since evolved into a multinational company devoted to the production of sporting goods. The Group’s business is balanced by its broad product portfolio, as well as by a presence in all major global markets.

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Anta Sports: China’s largest sporting goods brand (and the third-largest in the world by market capitalization, after Nike and Adidas). Its high-growth brand ‘Anta’ focuses on athletic footwear & apparel products, catering to lower and middle-income groups. In addition, Anta Sports is a leading sports retailer in China, with 11,316+ brick & mortar stores. The company is pursuing a multi-brand and onmi-channel strategy – broadening its customer base through acquisitions of high-end international sportswear brands that leverage sales in its home markets.

Deal delivers:

  • Extends Anta’s overseas reach, fulfilling a core strategy to grow by acquiring established international brands that complement the Chinese home market: 43% of Amer’s sales are in EMEA, 43% in the Americas, but just 14% in Asia Pacific.
  • Expands Anta’s scale in a bid to challenge the market leaders Nike & Adidas, both in its home market and also internationally (there are plans to launch the Anta brand in Europe in 2019).
  • Enables Anta to diversify and expand market share in a number of new categories, such as ball sports (Wilson, DeMarini, Louisville Slugger), winter sports (Atomic, Armada Skis), sports instruments (Suunto), and cycling (Mavic, ENVE Composites). These segment-leading brands offer synergies.
  • Distribution scale in the Chinese market, where Anta has 11,316 retail stores and a large portfolio of brands positioned across the mass market to high-end market spectrum. Amer has already enjoyed strong growth in China over the last five years – its sales there have grown at CAGR5YR of 29%, and represented 6% of sales in 2018.
  • Reduces debt: the consortium will pay down EUR1 billion euros in debt from Amer Sports.

“Through our multi-brand strategy, we aspire to become a competitive, global, multi-brand company with newly added brands. To that end, we are launching our globalization strategy in 2018. Through product innovation and R&D investment. We will tap into the global market with our best brands.” Ding Shizhong, Anta’s chairman and CEO.

Alexandre Ebin
Alexandre Ebin
Partner
France

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