Nike buys Umbro for £285 million

Leading sportswear company Nike has agreed a £285 million takeover bid to buy English football boot brand Umbro.

Nike has offered 195p per share for England’s official football shirt supplier, and with Umbro shares closing at 165p last night, the offer was recommended to the Umbro board. The offer places a premium of around 61% over the Cheshire based company’s share price before takeover interest emerged.


Steve Makin, chief executive of Umbro, said: “This is an excellent deal for all our stakeholders: it provides great value for shareholders and exciting prospects for our colleagues, partners and customers around the world. We will be a stronger and better business as part of Nike and this deal will allow us to accelerate our existing growth strategy by leveraging Nike’s global resources and expertise.”

Umbro has been facing a challenging time of late, with poor sales of England football shirts being blamed on poor England performances. Furthermore, following last week’s 2-1 defeat to Russia, analysts predicted that Umbro profits could fall by more than 40% next year should England fail to qualify for Euro 2008. Despite the recent woes of Steve McClaren’s team the white England football shirt remains the bestselling replica kit worldwide.

Brian Barwick, the chief executive of the FA, said: “We are delighted that the proposed acquisition will allow us to continue our strong historical relationship with Umbro while benefiting from the marketing expertise and financial strength of Nike. Nike has provided firm assurances that the FA relationship with Umbro will be protected and enhanced, and we look forward to working closely with both companies moving forward.”

Nike is expected to retain Umbro’s management team, however Nigel Doughty, the private equity boss and Nottingham Forest owner who has been chairman of Umbro since 1999, is expected to leave. He would receive more than £7 million for his 2.53 per cent stake.

Only last week, JJB Sports, increased its stake in Umbro to 10%, with Sports Direct, owned by Newcastle United’s Mike Ashley upping its shares to 15%. Both JJB and Sports Direct were initially expected to bid against Nike, who itself is a leading supplier for the retail outfits.

nike-buys-umbroNike’s aggressive expansion in the football market falls in line with its brand vision to become the world’s leading football brand by 2010, with a Nike spokesperson adding that the Umbro deal would allow it to “significantly expand” its presence in “a key growth category” for the firm.

With its takeover of Umbro, Nike will gain a huge foothold in the Premier League, representing players such as Wayne Rooney, Fernando Torres, and Cristiano Ronaldo, as well as Umbro’s England internationals John Terry and Michael Owen. Indeed, Nike and Umbro are football shirt suppliers to ten of the twenty Premiership teams; Arsenal, Aston Villa, Fulham, Man Utd, (Nike) and Birmingham City, Blackburn Rovers, Everton, Sunderland, West Ham, Wigan (Umbro).

Written By
More from Felipe


Nemanja Vidic could be out of manchester United's crunch game with Chelsea.
Read More
Leave a comment

Your email address will not be published. Required fields are marked *