Hong Kong-listed Anta Sports has entered into a non-binding agreement to fully acquire the maker of Wilson rackets and Salomon sportsgear for €4.7 billion ($5.5 billion), underscoring the nation’s growing influence in the global sports market.
In what could be the biggest-ever outbound acquisition by a Chinese sports company and the biggest Chinese outbound M&A deal by a non-state entity in over a year, Anta Sports said it wants to pay €40 in cash for each of Amer Sports’s 116.5 million outstanding shares.
The plan outlined in a stock market filing on Tuesday is to submit the buyout proposal for the Finnish company together with Chinese private equity firm FountainVest Partners, which has previously backed billion-dollar take-private deals for the likes of Focus Media, iKang Healthcare and Zhaopin.
Anta, China’s largest sportswear maker by market value, is bucking the trend of sharply declining Chinese outbound acquisitions after Beijing ordered public and private enterprises to stop irrational acquisitions of foreign assets in late 2016 to help stem capital outflows.
If the $5.5 billion take-private goes ahead, it would be the biggest Chinese outbound M&A transaction by a private company since Global Logistics Properties’ $11.6 billion deal last year.
To be sure, any deal is still subject to board approval and the completion of dual diligence into the Helsinki-based target company. It would also require 90% acceptance from Anta's shareholders on a fully diluted basis.
Anta is also no stranger to acquisitions. It is probably China’s most acquisitive sports brand having snapped up assets including FILA’s China business, Japanese sportswear company Descente, South Korea’s Kolon Sport and children’s clothing brand King Kow.
But none of these is comparable to the prospective Amer acquisition in terms of scale. The $12.4 billion company will be buying an asset worth close to half its market value. In addition, it is likely to be a highly-leveraged buyout since Anta had only $1.5 billion in cash as of the end of June.
The proposed acquisition also fits into Anta’s master plan of turning into a global sportswear company. Over the last few years, Anta has been making inroads into the global sports market by sponsoring top-tier athletes and sports events.
The Chinese firm is best-known as the sponsor for NBA stars Klay Thomson, Kevin Garnett and Rajon Rondo, as well as Filipino boxing world champion Manny Pacquiao. Anta is also an official sponsor in the upcoming 2022 Winter Olympic and Paralympic Games in Beijing.
Anta’s prospective bid for Amer chimes with Beijing’s ambition to increase its influence in the global sporting business. In recent years, Chinese firms have been snapping up major sports assets including soccer clubs and marketing agencies, as well as sponsoring master sports events like the Olympics and soccer World Cup.