(Photo: Robert Deutsch-USA TODAY Sports via Reuters)
China's Anta Sports Products Ltd., with Chinese buyout firm FountainVest has approached Finnish sports equipment maker Amer Sports Oyi for a $5.5 billion takeover. Amer Sports makes the Wilson tennis rackets used by Serena Williams. The Finnish company also makes the Atomic and Salomon ski equipment.
Anta, which on its own is China's largest producer of athletic apparel, has reportedly sought advice from banks on how it can proceed with its offer for Amer Sports, people familiar with the matter revealed to Bloomberg.
Anta has a market value of $12.5 billion and has been actively seeking to diversify overseas by doing acquisitions of already known brands. The company is also said to be engaging other entities in its bid to enter the European market as early as 2019, Anta Brand President James Zheng told Bloomberg in February.
The company's decision to venture into the global market is in compliance with the Chinese government's push for the country to excel in all kinds of sports played internationally. With this, the government would also like home-grown sports companies to compete with their global counterparts.
All this is being conducted in preparation for Beijing's hosting of the Winter Olympics in 2022. As for Anta, its possible buyout of Amer Sports as early as this year will allow the Chinese company an access to revenues from skis and snowboards equipment just in time when Winter Olympics take place. Anta could even get its capital back as early as 2020 when the 2020 Summer Games in Tokyo is held.
Bloomberg stated that Anta brought the rights to the Fila brand that is operating in greater China. The sports equipment company has $1.5 billion in cash and other assets at the end of June.
In a statement, Amer Sports confirmed to investors that it received a price indication included in a non-binding preliminary Indication of Interest from a consortium comprising Anta and the private equity firm FountainVest Partners. The approach involved acquiring the entire share capital of Amer Sports.
Under the non-binding approach, shareholders of Amer Sports would be entitled to receive a cash consideration of EUR 40.00 per share for all of their shares in the Finnish company.
Together with Amer's confirmation of its receipt of the indication of interest, the company also clarified that it is not engaged in any discussions with the consortium and has made no decisions about the approach. At this point, everything is still under review and all conditions are being considered.
Amer, nevertheless, assured it will give more information in an instance that decision with the consortium is met.
A source familiar with the deal told Reuters that Amer is aiming to finalize the buyout deal by the end of 2018.
Accordingly, Amer's second-largest shareholder told Reuters that it was open to the approach but needed ample time to analyze the offer.
Juha Varis, Danske Bank portfolio manager, said Anta is more profitable and has grown faster than Amer.
