Breakingviews – Anta deal would be a marathon not a sprint

Making a success of buying Finland’s Amer Sports would be a marathon not a sprint for Anta Sports Products. The Chinese suitor’s stock has suffered since it approached the owner of winter gear brands Salomon and Arc’teryx in September with a $5.3 billion cash offer. Shareholders may be worried about the high price and the prospect of initially lower margins and dividends, but the company’s experience with Fila suggests the deal could pay off.

At 40 euros a share, Anta and its partners – which may soon include Chinese internet giant Tencent, according to Bloomberg – would be paying an extra 40 percent, or 1.3 billion euros ($1.5 billion), over Amer’s undisturbed market value. To make that premium stack up requires almost 190 million euros in annual synergies, or 3 percent of the estimated combined revenue for the two companies this year, Breakingviews reckons. The median proportion promised from M&A is around half that, Boston Consulting Group has found…

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