Explosive News: Tencent Joined The Anta Consortium, 36 Billion 100 Million Acquisition Of The Parent Company

Bloomberg quoted sources Wednesday morning as saying that technology giant Tencent Technology (0700.HK) intends to join the acquisition of the consortium.

Stimulated by news, Amer Sports rose sharply in early trading to more than 5% US $35.88.

In the past two years, Tencent is actively distributing the retail industry, and has invested in China Yonghui supermarket, super species, Hai Lan home, Carrefour and other supermarkets, apparel retail enterprises.

Brand of Amer Sports

In September 11th, Amer Sports (Ya Mafen), the parent company of the international famous outdoor clothing brand Arc 'Teryx (Finland), confirmed that it received a non binding initial purchase intention letter (preliminary indication of interest) from a consortium composed of China Anta Sports Products Limited (hereinafter referred to as Anta) and Asia private Holdings Company FountainVest Partners (Fang Yuan capital).

The letter of intent is limited by certain conditions, including due diligence, the final approval of Anta board of directors and Fangyuan capital investment committee, financing from established financing sources and approval from the Amer Sports board.

The completion of the acquisition will also be limited by more conditions, including the acceptance of the offer by shareholders holding at least 90% of the issued shares of Amer Sports, and the approval of all relevant regulatory authorities.

Amer Sports, a major shareholder of Finland pension fund, KEVA declined to comment on the takeover intention of Anta consortium. A Finland institution with its 4.29% largest share of the second largest shareholder (Finnish full name: Maa- Ja vesitekniikan tuki) said it was open to the proposal, but needs more time to make proper assessments.

Amer Sports said that no negotiations had been made with the consortium and no decision had been made.

According to people familiar with the matter, although the two sides have not reached any substantive paction, Anta consortium plans to submit an offer to Amer Sports in the next few weeks, and plans to complete the acquisition by the end of the year.

Unlike Anta, which has acquired the right to operate in China or set up a Sino foreign joint venture to focus on the Chinese market, after its acquisition of Amer, it will assume its worldwide brand operation.

This reflects the ambition of Anta to promote the internationalization of the brand. In August this year's earnings conference, Zheng Jie, President, told the media that Anta hopes to acquire the international sports brand that matches Anta's position in the future, and complement each other with the Anta brand, so as to realize the common internationalization strategy of the brand and the group.

Therefore, the takeover offer for world class Brand Company Amer Sports, issued in September, is regarded as the first step for Anta to move towards an international route in search of a larger incremental market.

Of course, there is also a view that Anta's acquisition is preparing for the 2022 Beijing Olympic Winter Games.

In September of this year, Anta signed a sponsorship agreement with the Beijing Olympic Organizing Committee and became the official sportswear partner of Beijing's Winter Olympic Games and Paralympic Games in 2022.

In addition, Anta reached a 7 year cooperation agreement with the Olympic Organizing Committee in September last year, covering the two Winter Olympic Games and the two Olympic Games, including the Beijing Winter Games.

It is not difficult to speculate that, if the acquisition is achieved, Amer will not only fill Anta's professional type outdoor ice and snow sports and extreme sports products, but also give Anta a lot of research and development, market experience, patent technology and valuable.

Multi brand operation experience.

Anta's acquisition began with FILA 9 years ago.

At that time, Anta clearly realized that although it already had a solid supply chain and production capacity, the established brand temperament became the ceiling of the high-end market to some extent.

Instead of forcibly changing brand positioning, the more secure way is to buy buy and buy. Effective mergers and acquisitions of other brands and the establishment of joint ventures can help them expand rapidly to other categories, penetrate into the high-end consumer class, and achieve multiples of growth.

Sign Wang Yuan as spokesperson FILA to create a fashionable young brand image.

After taking over FILA, Anta carried out a pformation from top to bottom: the brand positioning in the Chinese market was "Gao Shishang sportswear"; increased control over sales channels, distribution of stores to direct camp mode; refurbishment of stores to adapt to the new brand positioning; continuous innovation and development of products based on the characteristics of Asian people; through Hsu Chi, Chen Kun, Gao Yuanyuan and other spokesmen to enhance market identification.

Finally, in 2014, Anta turned FILA into a profit, and achieved a 5 consecutive year of growth, becoming an important engine for Anta's growth in recent years. In the first half of 2018, the non Anta brand achieved a year-on-year increase in 80%-85%, which came mainly from FILA, which now accounts for about 25% of the total revenue of the company.

But for Anta, in addition to boosting performance, the more important implication of FILA is that it provides a template and valuable operational experience for the "multi brand and single focus" strategy established by the group.

"The first person to eat crabs already knew how to do it, and the other brands in the rear group were set up when they were built," Yao Weixiong, the president of FILA, said to the media, "because each company has its own unique business model and method, so the experience of FILA can make the other brands in the group useful for reference."

Since then, Anta has started the way of "buy and buy": in 2016, it set up a Chinese company with the high-end ski brand Desanto (Descente), Japan's parent company and Itochu trading company, accounting for 60% of the shares. Currently, it has 85 stores in China. In 2017, it established a joint venture with the Korean outdoor mountaineering brand Kolon, and now has 189 stores in China. In the same year, Anta wholly acquired the entry-level outdoor brand Spandi (Sprandi) and the middle and high-end Hongkong.

Brand Kingkow has opened 81 and 63 stores in China this year.

And if the acquisition is made, Amer Sports will become the largest purchase brand and the most famous brand in Anta's "purchase list" so far.

Therefore, in the face of huge paction volume, Anta is also in urgent need of more financial partners to join. Tencent's entry is likely to speed up the acquisition to a certain extent.

In the past two years, Tencent has been actively investing in supermarkets and apparel retailing businesses to actively organize the retail industry.

Among them, clothing as the first category of online shopping products, for the electronic business platform is a growth point of competition.

Tencent this year

The first conspicuous attack took place in January, and nearly 2 billion 500 million stake in Hai Lan's home, accounting for 5% of the latter. The two sides plan to jointly set up 10 billion yuan industrial investment fund.

Some analysts believe that the value of Hai Lan's home to Tencent lies in its strong industrial chain control capability.

Hai Lan's home solves the goods by docking suppliers on the upstream, downstream stores the franchisees to open stores, and is responsible for the brand promotion and store operation in the middle, so that it can successfully master and integrate a large number of domestic businesses with the "light assets" mode.

Supplier resources.

In other words, with the advantages of traffic and channel, the most urgent thing for Tencent and its consumer racers is brand and goods.