Will Precor get Chinese owners?

18 Sep 2018

The prospective ownership of Precor has been under intense discussion in the last few days, after Amer Sports suggested that it could study standalone options for its fitness division –and then confirmed that it had been approached with a potential Chinese bid worth €4.6 billion for the entire group.

Amer Sports owns Precor along with many other sports and outdoor brands, from Wilson to Salomon, Atomic, Peak Performance, Arc’teryx, Suunto and more. Its market capitalisation last week amounted to about €3.4 billion.

Just a few months after Brunswick Corporation started preparing for the spin-off of the Life Fitness division, the option to divest Precor was mentioned ahead of an investor day where the Finnish sports group assessed the efficiency of its strategic choices and assets.

Amer told analysts that the focus for the next years should remain on apparel, footwear, winter sports equipment and team sports. The cycling division has been placed under strategic review, and the fitness and sports instruments divisions are in between.

“We now take the current cycle to its end, we confirm that we can perform, and we confirm that these businesses can contribute to the company at the target level. And then based on that, we’ll make the next choices,” said Heikki Takala, the group’s chief executive.

But a few days later, Amer Sports baffled some analysts by confirming that it had an indication of interest from a Chinese consortium to buy the entire group. If the potential transaction went ahead, shareholders would receive €40.0 in cash per share.

Part of the Chinese partnership is Anta Sports Products, the largest Chinese sports apparel and footwear brand.
The other partner is FountainVest, an investment firm from Hong Kong. It made an appearance in the fitness industry late last year through an investment in the Pure Group, a company from Hong Kong that runs yoga studios and fitness clubs.

Amer Sports group was quick to emphasise that it was not holding talks with the potential Chinese buyers, and that the preliminary bid interest was conditional.

Read the full story and analysis in FNE#64.

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