Skechers to Be Acquired by 3G Capital in Multibillion-Dollar Deal
In a significant move within the footwear industry, Skechers has announced a definitive agreement to be acquired by investment firm 3G Capital for $9.4 billion. This acquisition will mark the end of Skechers’ public status after nearly thirty years, making it the largest deal ever recorded in the footwear sector.
Details of the Acquisition
The acquisition, which received unanimous approval from Skechers’ board of directors, is expected to conclude in the third quarter of this year. Funding will be sourced from 3G Capital and debt financing arranged through JPMorgan Chase Bank. The investment firm will pay $63 per share, reflecting a 30% premium over Skechers’ average stock price.
Leadership Continuity
Despite transitioning to private ownership, Skechers will retain its current leadership team. Founder, Chairman, and CEO Robert Greenberg will continue to lead the company, alongside COO David Weinberg.
“With a proven track record, Skechers is entering its next chapter in partnership with the global investment firm 3G Capital,” stated Greenberg in a press release. “Given their remarkable history of facilitating the success of some of the most iconic global consumer businesses, we believe this partnership will support our talented team as they execute their expertise to meet the needs of our consumers and customers while enabling the Company’s long-term growth.”
Current Market Position
Skechers currently stands as the third-largest footwear company in the United States, behind Nike and Deckers, with a market capitalization of approximately $9.25 billion prior to the acquisition announcement. Founded in 1992, the company went public in 1999, starting with an initial share price of $11.
In recent financial reports, Skechers reported impressive earnings, with sales reaching a record $2.41 billion in the first quarter ending March 31. This figure marks a 7.1% increase year-over-year, largely driven by a 7.8% rise in wholesale sales. Notably, international sales constituted around 65% of the company’s total business.
Challenges and Industry Context
Amid the acquisition news, Skechers, along with other major footwear companies, recently appealed to U.S. President Donald Trump for relief from reciprocal tariffs, which can reach as high as 145% for imports from China. The letter, signed by prominent brands like Nike, Adidas, Under Armour, and Puma, emphasized the potential adverse effects of these tariffs on footwear pricing and inventory availability in the U.S.
About 3G Capital
3G Capital is known for its rigorous cost-cutting measures and restructuring strategies. Established in 2004, the firm champions a zero-based budgeting approach, emphasizing efficiency and capital optimization. Previously, 3G Capital acquired a majority stake in Hunter Douglas NV for $7.1 billion in 2021 and facilitated the significant merger between Kraft Foods and H.J. Heinz in 2015 with support from Berkshire Hathaway.
Market Impact and Future Outlook
Following the announcement, shares of Skechers experienced a boost, increasing by over 24%. As the company prepares for privatization, stakeholders are keenly watching how the acquisition will influence Skechers’ operational strategies and market presence moving forward.