Nike Snaps Up Umbro In £285m Deal

Lured by the appeal of the England football team kit contract, Nike has acquired
rival sports brand Umbro in a deal which values the brand at £285m.

The acquisition of Umbro, which has been independent throughout its 70 year
history, further establishes Nike’s strong foothold in the UK football market.

Umbro, which is listed on the London Stock Exchange, unanimously recommended
that shareholders accept the offer of 193.06p, which together with the declared
dividend values the company at approximately 195 p per share.

Since the early 1990s, Nike has grown its football revenues from about $40m
to approximately $1.5 bn.

Umbro sells products directly or through licensees in more than 90 countries
and has sports marketing relationships with many top football players, teams and
leagues, including the England national team.

Umbro’s 2006 annual revenues were approximately £149.5m and its latest
financial report estimated that if licensed sales were translated to direct
sales based on wholesale cost, total wholesale equivalent sales were
approximately £409.4m.

Nike has stated that it intends to operate Umbro as a stand-alone affiliate
brand, with a focus on accelerating the brand’s existing growth strategy.
Similar to other brands in Nike’s portfolio, Umbro will look to benefit from
Nike’s product research, design and development expertise, and supply chain and
distribution resources.

The move by Nike to acquire Umbro follows a general market trend of
consolidation following last year’s buyout of Reebok by Adidas.