French luxury group PPR has announced it will take over Volcom, the American surfing, skating and snowboarding brand. Volcom, which PPR headquarters said to be complementary to Puma, cost 607.5 million dollar (409 million euro).
PPR's takeover, offering a 24% bonus on the closing price, is considered to be a friendly one and has been accepted by Volcom's board of directors, who will recommend it to the stock holders. The takeover should be completed by the end of September.
Moving out of distribution
Volcom's acquisition is important for PPR's repositioning strategy, moving out of the distribution business and focussing on casual and sports wear. Last year, the French consortium sold furniture chain Conforama to a South-African company and it is currently looking for a buyer for entertainment retail giant Fnac.
According to CEO François-Henri Pinault, Volcom is one of the finest action-sports brands on Earth, with a very strong identity that is derived from its street credibility amongst surfers, skaters and snowboarders. Focussing on students, the American brand earns almost 70% of its turnover in its home market USA. This is a market that is not yet served (fully) by Puma, the sports brand that holds a strong position in Latin-America and of which PPR controls 73% of the shares. Both brands can learn a lot from eachother, said Pinault, which is exactly why they are so complementary.