Adidas a takeover target for Asics and Nike?

Shares in German football boot brand Adidas rose this week amidst talk of a possible joint takeover bid between U.S. rival Nike and Japanese sports brand Asics.

adidas-takeover-asics-nikeSpeculation has mounted that the two sports companies would together bid $15.28 billion for Adidas, after its shares rose on Monday by 3.4 percent to 47.00 euros. The football boot brand is the world’s second largest sporting goods maker, with a market capitalisation of $13.5 billion.adidas-takeover-asics-nike

Although Nike has recently agreed a deal to buy English football boot brand Umbro for £285 million (see article) a takeover of the German football giant could prove highly problematic. Any potential buy out of Adidas would most likely not get a green light from the relevant authorities, as the result would be a sporting goods giant with few if any competitors.

Adidas’s CEO Herbert Hainer has poured cold water on such speculation saying it was “pure nonsense”, adding that “nobody had approached Adidas.” He said anti-trust agencies would never approve a merger with the rivals because they would control nearly 80 percent of the world’s market or even more in certain parts. Hainer also said an industry outsider was unlikely to buy Adidas because of a lack of cost synergies, while Nike, the industry’s number one, would not be allowed to do so.

Nike Chief Executive Mark Parker has said the company, based in Oregon, USA, wants to grow revenues from $16.3 billion last year to $23 billion by 2011 and will do so through strategic acquisitions. But the purchase of Adidas, would catapult Nike well beyond that sales figure. Adidas’s revenues exceeded $13.2 billion last year following its purchase of Reebok. The company has a market value of about $13.8 billion.

adidas-takeover-asics-nikeAsics was established in 1949 in Kobe, Japan as Onitsuka Co. Ltd. being involved predominantly in the manufacture of basketball and athletics shoes. In 1977, the company was rebranded as Asics Corporation. In March 2005, Asics posted annual sales figures of 144,600 million yen ($1.3 billion)