Skechers Sold for $94 Billion to 3G Capital: A Game Changer in the Sports Goods Market
In a landmark deal, US sports shoe brand Skechers has officially been sold for $94 billion to 3G Capital, a Brazilian-American financial investment firm. Led by billionaire Jorge Paulo Lemann, 3G Capital made an offer on Monday of $63 per share for Skechers, a proposal that has garnered attention due to its 28% premium over the company's closing price on the previous Friday. In a strong start to the trading day, Skechers shares surged 25%, reaching $61.75.
As part of the acquisition, 3G Capital intends to take Skechers private. The management team, headed by CEO Robert Greenberg, is expected to remain with the company, ensuring continuity during this significant transition.
Skechers has experienced robust growth in recent years, with revenues tripling to an impressive $9 billion over the last decade. This surge positions the company in fierce competition with Puma for the third spot in the global sports goods market, trailing only behind giants Nike and Adidas.
A key strategy for Skechers has been the inclusion of celebrity endorsements in its marketing efforts. The brand has partnered with high-profile figures, including Britney Spears and Christina Aguilera. More recently, English soccer star Harry Kane of Bayern Munich has also joined the roster of endorsers.
However, the company is currently facing challenges posed by U.S. import tariffs on goods from Asia, as the majority of its shoe production is based in China. Skechers recently withdrew its financial forecast for the current year, attributing this decision to the trade policies under President Donald Trump, which have dampened consumer sentiment across the industry.
3G Capital anticipates that it will acquire over 80% of Skechers shares in the long run. Shareholders will have the option to receive either $63 in cash per share or $57 in cash plus a stake in the future non-public holding company for Skechers.
In the past, 3G Capital has made its mark in the U.S. as a significant shareholder in Kraft Heinz, where it sought to merge with European rival Unilever—a deal that ultimately did not come to fruition. The firm also briefly invested in Burger King, showcasing its investment strategy across various sectors.
This acquisition marks a pivotal moment in the sports goods market, and it remains to be seen how 3G Capital's management will shape the future of Skechers amidst the evolving landscape of consumer preferences and international trade.
Related Sources: