Umbro to retain brand under Nike ownership

LONDON -- Nike announced plans to acquire Britain's Umbro on Tuesday, continuing its aggressive moves in the field of soccer in an attempt to gain a larger international market presence in the sport.

The acquisition is a major step for the U.S. apparel and shoe maker, which has said it wants to become soccer's top brand by the next World Cup in 2010.

Nike's soccer brand has performed well and grown in recent years, but Umbro's ties to the United Kingdom, where Nike has struggled, should boost the company's profile and performance.

"It's similar to the Converse brand, where Nike had a great basketball brand but there was room in their portfolio," Sara Hasan, an analyst at McAdams Wright Ragen, said of the $582 million deal.

Umbro, based in Cheadle, northwest England, designs, sources and markets soccer-related apparel, footwear and equipment sold in more than 90 countries. With its 45 international licensees, Umbro supplies uniforms to the national teams of England, Ireland, Sweden and Norway, six English Premier League teams and more than 100 other professional teams globally.

Nike has aggressively moved on traditional suppliers to the sport, most recently in a heated nine-month bid to replace Adidas as outfitter for the German Soccer Federation.

German soccer authorities rejected a $680 million offer from Nike and opted to extend its contract with Adidas for roughly half the value.

Nike Inc., through its subsidiary Nike Vapor Ltd., agreed to pay $3.94 in cash for each Umbro PLC share, a 61 percent premium over the closing price on Oct. 17, the last business day before Umbro confirmed that it had received an offer.

Nike said it intended to operate Umbro as an independent, U.K.-based subsidiary, like its Converse brand.

The deal was backed by the Football Association, the governing body for English soccer.

"The FA has enjoyed an excellent partnership with Umbro for more than 20 years. 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," said Brian Barwick, the FA's chief executive officer.

"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."