The UK's Office of Fair Trading (OFT) has cleared Nike's anticipated GBP285m (US$565m) acquisition of Umbro.

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.