Anta Sports Products Ltd., a dominant player in China's sportswear sector, is reportedly advancing plans to expand its global footprint by proposing to purchase a substantial stake in Puma SE, the internationally recognized German sports brand. According to reports citing unnamed sources, Anta has offered to buy the 29% share owned by Artemis, the investment arm of France's Pinault family, which is Puma's largest shareholder.
This proposed acquisition marks a strategic continuation of Anta's "multi-brand, multi-category" approach aimed at broadening its global presence via targeted acquisitions and partnerships. Anta has demonstrated a consistent pattern of growing its brand portfolio, most recently acquiring German outdoor apparel company Jack Wolfskin for $290 million in 2022. Additionally, in 2019, Anta led a consortium that purchased Amer Sports, a Finnish conglomerate encompassing brands such as Wilson and Arc'teryx, in a transaction valued at 4.6 billion euros ($5.36 billion).
Becoming Puma's primary shareholder would propel Anta ahead in the race among Chinese sportswear companies seeking expanded global relevance. Puma's extensive international network encompasses operations in more than 120 countries and a workforce of approximately 22,000 employees worldwide. For Anta, which has mapped out ambitions to launch 1,000 retail outlets across Southeast Asia within the coming three years, controlling Puma offers not only a prestigious global brand but also established institutional expertise and retail connections essential for operating successfully across diverse international markets.
The challenges inherent to the deal are multi-faceted. A key issue is valuation, as Artemis reportedly anticipates receiving an offer exceeding 40 euros per share for its stake—around 70% higher than Puma’s prevailing market price. This valuation suggests a cost of over 1.6 billion euros for the 29% holding. Whether Anta is prepared to meet this premium remains uncertain. Furthermore, regulatory scrutiny is expected, given the geopolitical sensitivities surrounding a Chinese company acquiring a significant portion of a European brand renowned for its heritage.
Operational dynamics also present uncertainties. Puma has faced year-over-year revenue stagnation and profit declines amid a fiercely competitive environment dominated by global leaders like Nike and Adidas, as well as a surge of emerging brands including On Running and domestic Chinese competitors such as Anta itself. The German company's recent strategic adjustments under CEO Arthur Hoeld, who commenced leadership in mid-2023 following experience at Adidas, include workforce reductions aimed at returning to growth. Nevertheless, the outcome of these restructuring efforts is yet to be determined, potentially influencing Artemis’s decision to retain or divest its stake.
Anta's financial fundamentals rest predominantly on its Chinese operations, primarily driven by its flagship brand and the Korean-owned Fila, which collectively accounted for 81% of the company's 38.5 billion yuan ($5.5 billion) revenue during the first half of the previous year. Despite robust growth from its other brands, Anta’s main revenue streams continue to hinge on its domestic market. The addition of Puma would diversify revenue sources, insulating Anta against domestic economic fluctuations, particularly China's current phase of consumer caution and economic deceleration.
Importantly, Anta's expertise in revitalizing brands within the Chinese market is well established. Its management of Fila's China, Hong Kong, and Macao operations since 2009 transformed the brand into a premium lifestyle label. This capability could be instrumental in reversing Puma’s recent sales declines in China, aligning with Anta's value proposition beyond financial investment.
Despite the growing enthusiasm surrounding Anta’s bid, market reaction has been mixed. Puma's share price surged following announcements of the potential acquisition, signaling investor optimism about future prospects. In contrast, Anta’s stock declined, reflecting investor concerns over the sizeable financial commitment and premium cost inherent to the proposed purchase.
In the broader competitive context, Anta maintains a price-to-earnings ratio of about 14, slightly trailing Li Ning's 16 but notably higher than smaller domestic rivals Xtep International and 361 Degrees, which report ratios around 9. Both Anta and Li Ning have reportedly considered bids for Puma. This reflects a trend among leading Chinese sportswear companies to strategically pursue international expansion through acquisitions rather than solely organic growth, which can be slower in this sector.
Ultimately, an acquisition of a controlling interest in Puma would represent a bold leap toward bridging Anta's domestic market dominance with targeted global advancement. Nevertheless, realizing this vision will require navigating significant obstacles including valuation alignment, regulatory approvals, cultural integration, and operational execution across varied markets.