Top > Business > 2007 > April > 2007-04-12

French PPR to Purchase Puma

The French high-end retailer PPR has made an offer to purchase the German sportswear company Puma for $7.1 billion. PPR currently owns a variety of lucrative fashion brands, including Gucci, Yves Saint Laurent, Sergio Rossi, Boucheron, Bottega Veneta, B?dat & Co, Alexander McQueen, Stella McCartney, and Balenciaga. The company is headquartered in Paris and is run by its founder, billionaire businessman Fran?ois Pinault.

PPR announced Tuesday that it agreed to purchase 27% of Puma from its largest stockholder, the German company Mayfair, owned by the Hertz family. The company also announced that it intended to publish a purchase offer for the rest of the company`s shares. Puma responded enthusiastically to the proposal, saying it will recommend its shareholders take the proposal, saying PPR`s offer was "in the best interests of the company," based on a fairness opinion by Lehman Brothers. Following the news Puma shares rose 8.3% to a record high 340.25 Euros per share, in the Frankfort Stock Exchange. Last week the company`s stock rose 10%, following rumors of negotiations with PPR. Puma reported sales of 2.37 billion Euros, during 2006, and presented an optimistic forecast for 2007.

Puma`s products are sold in 80 countries around the world, with expansion potential in China and Korea, due to the upcoming Beijing Olympics in 2008. According to Merrill Lynch, China is currently responsible for 15-20% of the company`s sales, less than its rivals Adidas and Nike. Puma and Adidas were both founded in 1940, after the brothers Rudolf and Adolf Dassler failed to agree on company policy for their co-founded shoe company, founded in 1924. Adidas is currently Europe`s largest sporting goods company.