Chinese company Anta Sports has announced an agreement to become the largest shareholder in Puma, acquiring the 29.06% stake currently held by the Pinault family. The deal involves an upfront payment of €1.5 billion and is expected to be completed by the end of this year.
The transaction involving the sale of the Pinault family's stake to the Chinese company Anta Sports had been rumored in the market since November . The change in ownership structure occurs at an adverse time for Puma, amidst increased competition in the sporting goods sector.
Founded in 1991 in southeastern China, Anta Sports gained scale throughout the 2000s through an aggressive acquisition strategy, transforming itself into a multi-brand group. In addition to its own Anta brand, the company controls Fila in the Chinese market, owns Jack Wolfskin, and maintains a significant stake in Amer Sports, a conglomerate that includes global brands such as Wilson.
In the market, the change in the controlling stake was received as a sign of hope that the Chinese company Anta Sports could lead a turnaround at Puma. On Tuesday, January 27th, shortly after the announcement of the transaction, shares of the German company rose by about 10%. The day before, amid rumors about the deal, the shares jumped 17%.
Within Anta Sports, the acquisition of a significant stake in Puma is seen as an important step in the group's multi-brand globalization strategy. In a statement, Ding Shizhong, chairman of the company, expressed confidence in the Puma team and highlighted the intention to join forces.
“We believe that Puma’s share price in recent months does not fully reflect the brand’s long-term potential. We have confidence in its management team and its strategic transformation,” he states.
Even before rumors surfaced about the potential sale of the Pinault family's stake in the business, Puma's shares had been falling sharply on the Frankfurt Stock Exchange, accumulating a devaluation of 83% between 2021 and October of last year.
With the increase in value recorded in this session, Puma is approaching a market value of €3.5 billion, almost 30% above the level reached in October, but still representing only a fraction of the nearly €27 billion that its rival Adidas is worth today.
Its size is close to that of Anta Sports itself, valued at HK$218 billion (approximately €23.45 billion), behind only Nike and Adidas among the world's most valuable sporting goods companies.
But whether Chinese sponsorship will be enough to boost Puma's operations and put it back among the global elite will also depend on the synergy and potential synergies between the teams.
Although at a more solid level than Adidas, Anta Sports' shares have accumulated a drop of about 50% since their peak in 2021.
The factors contributing to this decline include increased pessimism regarding Chinese growth and the company's own struggles in the domestic market, where, in addition to competing with global giants, it also faces the rise of smaller companies like Li Ning.
Although some in the market had already priced in the transaction, Anta Sports shares rose another 2% overnight.
