Will EU Intervene in Amer Sports Takeover by Chinese companies?
HELSINKI, Finland – After Amer Sports announced one week ago that it wants to sell its activities in the cycling market with Mavic and Enve, the Finnish holding got a takeover bid for all Amer shares by the Chinese companies ANTA Sports Products and FountainVest Partners. Apart from the principal issue of how Amer’s Board and shareholders will react to the bid, it also raises the question of how the EU will deal with this planned takeover.
The question of how Brussels envisages acquisitions such as the proposed one of Amer Sports by Chinese companies stems from recent publications on EU policy and that of individual member states regarding Chinese investments in European companies. That policy is all about tackling trade distortions by China. Will Amer Sports as a medium-sized listed company in this context be an example for others operating within the European sport and bicycle markets that are attracting attention from Chinese companies which could result in takeover attempts?
Investment screening law
Fact is that it has become abundantly clear in Berlin, Paris, London and Brussels that China has drastically increased its takeovers in Europe, following restrictions on Chinese investments in the United States. A recent online report by renowned ‘Politico’ states “Berlin is preparing a reform of its investment screening law in order to give the government “wider screening possibilities,” in an apparent move to better defend itself against state-led takeovers from China.” This reform will allow the German ministry to check any purchase giving a non-EU investor a 15-percent holding or more voting rights — lower than the existing 25-percent threshold.
Tackling subsidized and state-owned enterprises
Moreover, Europe, the United States and Japan have joined forces to tackle subsidized and state-owned enterprises, as Politico reported. It is said that they “Aim to tackle systemic distortions in global trade mostly created by China’s massive interventions in the economy.” Last May the three already agreed on developing stricter rules on subsidies and state-owned companies.”
By the way; it’s not said here that the companies that want to takeover Amer Sports are subsidized and/or state-owned enterprises.
ANTA Sports and FountainVest Partners
ANTA Sports Products Ltd claims to be “A leading sportswear company in China, listed on the Main Board of Hong Kong Stock Exchange. For many years, we have been principally engaging in the design, development, manufacturing and marketing of ANTA sportswear series to provide the mass market in China with professional sporting products including footwear, apparel and accessories. In recent years, we have started moving full steam ahead on the strategy of “Single-Focus, Multi-Brand, and Omni-Channel” to deepen our footprint in the sportswear market in China. By embracing an all-round brand portfolio including ANTA, ANTA KIDS, Fila, Fila KIDS, Descente, Sprandi, Kingkow, Kolon Sport and NBA. We aim to unlock the potential of both the mass and high-end sportswear markets in China.”
In 2017 ANTA Sports Products Ltd recorded a turnover of CNY 16.7 billion (2.1b euro), supplied 11,000 stires in China and had a staff of 18,800.
FountainVest Partners says on its website that it is “A leading private equity firm investing in companies that benefit from China’s growth, now managing total assets over USD 4.5 billion. Our successful track record has made us the preferred partner for current and emerging industry leaders. Our investment strategy has consistently focused on businesses that benefit from the secular growing needs and rising aspirations of the expanding Chinese middle class. While we are a generalist fund that invests across sectors, we have strong experience in areas of healthcare, consumer retail, media & entertainment and lifestyle. Our deal types are both control and growth capital oriented, with us having a high operational focus and a dedicated portfolio management team. Over the years, we have been at the forefront of some of China’s most innovative and sophisticated transactions.”
ANTA Sports Products and FountainVest Partners placed a bid of 40.00 euro per share for all of shares in Amer Sports. Yesterday, Amer Sports shares traded at the Helsinki stock exchange for 34,20 euro while one year ago Amer Sports shares traded for 22,62 euro.