Nike clear for Umbro takeover

News

Samantha Loveday Jan 16 2008, 5:08pm

Office of Fair Trading gives go ahead for £285 million purchase of football kit maker.

The watchdog has decided that the merger raises no competition concerns in any market, according to internet reports this afternoon.

The parties do have a high combined market share - over 45 per cent - in replica kit sales, although the OFT found that this overstates rivalry between them. Club kits and England kits are not significant competitive alternatives, and Umbro's leading position is mainly based on its England kit deal, while Nike's sales come from its club kit deals.

The watchdog also ruled out concerns that allowing Umbro to come under Nike's control would make price fixing or other collusion between the companies' rivals more likely after the merger.

"Our principal focus was replica kits, not least given Nike's high post-merger share," said Chris Walters, assistant director of mergers at the OFT. "But as market share is only a starting point, we went on to conduct quantitative analyses due to a wealth of data provided by the parties and other market participants.

"This confirmed other evidence that the merger will not harm competition at any level of the sportswear supply chain."