UK: Office of Fair Trading OKs Nike-Umbro merger
The OFT said the merger, first announced on 23 October, raises no competition concerns in any market.
The OFT noted the overlap of Nike and Umbro's football kit and footwear offerings, and that both were keen to land sponsorship deals with domestic club sides. It said, however, that their share in most sectors was low.
In addition, it said that while the companies have a high combined market share - over 45% - in replica kit sales, that this "overstates rivalry between them".
The OFT said bidding data showed Umbro and Nike, with a combined kit deals share of around 26%, have not been closely competing bidders and that football teams have considerable strength in negotiating these deals.
The OFT also considered the issue of collusion, it said, having in 2003 fined Umbro and other members of a "price-fixing cartel" in replica football kits around the time of Euro 2000 - leading to a substantial fall in retail prices paid by football fans.
However, the OFT said that merger analysis is forward-looking and it has "ruled out concerns that placing Umbro under Nike's control would make tacit or explicit collusion between rivals more likely post-merger".
Chris Walters, assistant director of mergers at the OFT, said: "Our principal focus was replica kits, not least given Nike's high post-merger share.
"But as market share is only a starting point, we went on to conduct quantitative analyses due to a wealth of data provided by the parties and other market participants.
"This confirmed other evidence that the merger will not harm competition at any level of the sportswear supply chain."
Last month (21 December) Nike announced that the company's wholly owned subsidiary Nike Vapor had acquired 19.9% of Sports Direct International's holdings in Umbro for 193.06 pence per share, the offer price Nike announced in October.
In addition, Sports Direct gave an irrevocable undertaking to vote its remaining 10% stake in Umbro in favour of the transaction.
Umbro's board of directors has unanimously recommended that shareholders accept the offer from Nike, with a shareholder vote due at the end of the month.
Women's wear retailer The Talbots Inc is in the midst of a major turnaround aimed at slashing costs by $100m by the end of next year and restoring its business to profitable growth. Earlier this month...
Here is a roundup of the top five most-read stories on just-style this week. Click on each headline for the full story....
Textile manufacturer Chutex Group, which supplies goods for many of the world's top apparel brands, yesterday (3 July) faced a pay strike by 6,000 workers at a Vietnamese plant....
Nike will focus most of its advertising efforts on athletes and teams at the forthcoming Beijing Olympics - amid reports that it might not enjoy the television exposure afforded to official sponsors l...
Members of the US athletics team at this year's Beijing Olympics will be kitted out in Nike's "lightest ever" apparel and footwear, aimed at reducing drag and helping athletes to run faster....
Outdoor apparel and footwear maker Columbia Sportswear Company has appointed Tim Bartels as its new vice president of global footwear sales and promoted Mitch Fields to vice president of global appare...
Strong sales growth in Europe, Asia and the Americas has helped Nike Inc, the world's leading sportswear company, to a 12% jump in fourth quarter profit....
Sales of fashion-focused athletic shoes are racing ahead of those designed for a specific sport according to new figures released this week....
- Fashion fit for the future – strategies for speed
- Digitisation to drive new apparel-making models
- Will new Vietnam wage hinder competitiveness?
- Under Armour Lighthouse will disrupt production
- How TAL Apparel is staying ahead of the game
- Gap to shutter all UK Banana Republic stores
- Child refugees found in Turkey apparel factories
- Chinese manufacturer invests $20m in US facility
- M&S "unappealing" clothing a barrier to growth
- Reebok Liquid Factory reinvents shoe production
- Africa-Med strategic sourcing review – comparing East Africa, North Africa and Turkey
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Apparel (GLOBAL) - Industry Report
- Global Sports and Fitness Wear Market 2016-2020