Post by : Saif Rahman

Chinese sportswear giants Anta Sports and Li Ning are reportedly assessing a potential acquisition of the German sportswear label Puma, which has been facing considerable difficulties recently. This development comes as Puma's shares surged by 15% following the news of interest from the Chinese companies, although the stock is still down more than 50% this year.

Sources indicate that both Anta and Li Ning are considering placing bids for Puma and may collaborate with private equity firms to finalize the deal. However, the significant decrease in Puma's market valuation this year complicates discussions about a suitable price with its largest stakeholder, Artemis. This holding company controls the luxury group Kering, which owns Gucci.

Currently, Puma's market value is estimated at 2.52 billion euros ($2.92 billion). In comparison, Anta Sports is valued at approximately $30 billion, Li Ning at $6 billion, and Japanese brand Asics at $17.9 billion. Although Asics was mentioned as a potential competitor in the bidding, it has denied any interest in procuring Puma. Conversely, Li Ning has stated that no significant negotiations are underway regarding the possible acquisition and continues to prioritize its brand development.

Puma faces numerous hurdles in an increasingly competitive sportswear landscape. Emerging brands like On Running and Hoka, as well as established competitors like Adidas, have adversely affected Puma's sales. In response to these challenges, Puma's board has replaced former CEO Arne Freundt with Arthur Hoeld, who previously led sales at Adidas. Hoeld has unveiled a turnaround strategy, which includes trimming corporate positions by 900, refining the product lineup, enhancing marketing efforts, and reducing discounts. He anticipates a loss for Puma this year but aims for growth by 2027 following a “transition year” in 2026.

Artemis, which purchased its stake in Puma from Kering in 2018, has expressed reluctance to sell under the current market conditions while expecting a positive reversal under Hoeld’s leadership. Analysts suggest that Hoeld’s approach may not be innovative enough to quickly improve Puma’s situation, as it shares similarities with prior strategies.

The interest from Anta and Li Ning underscores the increasing inclination of Chinese companies towards global acquisitions, especially in the sportswear market, as they seek to broaden their reach. For Puma, a successful acquisition could inject much-needed funding and strategic direction, although negotiations and valuations will be intricate due to its financial difficulties.

Investors, analysts, and competitors will keep a close eye on Puma’s future as it works on its turnaround plan while also considering new ownership options. The coming months will reveal if Anta, Li Ning, or other potential bidders can reach an agreement with Artemis and shape the future of Puma's international standing.

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