Li Ning‘s Acquisition of ClarksPPT
[Li Ning’s Acquisition of Clarks](https://www.bloomberg.com/news/articles/202...
[Li Ning’s Acquisition of Clarks](https://www.bloomberg.com/news/articles/2021-09-28/clarks-chairman-li-ning-snaps-up-control-of- Iconic-shoe)BackgroundFounded in 1825Clarks is one of the world’s largest footwear brands and a household name in ChinaLi Ninga Chinese entrepreneur and founder of Li Ning Sports, is a former gymnast and Olympic gold medalistAcquisition DetailsLi Ning Sports International Ltd. (LNSI) announced on Sept. 27 that it has entered into a share purchase agreement with shareholders of Clarks plc under which LNSI will acquire approximately 53.5% of the outstanding ordinary shares of Clarks for approximately $130 millionUnder the terms of the agreementLNSI will purchase approximately 41 million ordinary shares of Clarks from a group of shareholders referred to as the “primary selling shareholders” and approximately 12.3 million ordinary shares of Clarks from another shareholder referred to as the “secondary selling shareholder”The primary selling shareholders include entities controlled by the Clark family and entities related to the founder and former chairman of Clarks plcwho will continue to hold minority stakes in Clarks following the transactionThe transaction is expected to close in the first quarter of 2022subject to customary closing conditions and regulatory approvalsStrategic RationaleCombining the iconic Clarks brand with Li Ning’s experience in China and elsewhere will create a formidable force in the global footwear industryChina’s footwear market has enormous potential but remains fragmentedcreating opportunities for a company with strong brand recognition and distribution channels to gain market shareThe deal will help Clarks expand its presence in Chinawhere it has only about 200 stores, compared with more than 1,300 stores in the U.K. and Ireland combinedFor Li Ning Sportsthe acquisition marks its first step into the global footwear market and will help diversify its revenue streamsThe transaction will also give Li Ning a platform to introduce Clarks’ products to Chinese consumershelping Clarks increase its market share in China’s fragmented footwear marketClarks’ technology and know-how in shoe manufacturing could also help Li Ning Sports improve its product development capabilities and manufacturing efficiencySummaryThe acquisition of Clarks by Li Ning is a significant development that brings together two iconic brands with deep roots in their respective countries and regionsWith China’s footwear market showing strong growth potentialthe deal positions both companies to take advantage of this opportunity while expanding their global footprintLi Ning’s ownership of Clarks also represents a unique opportunity for both brands to collaborate and innovate while connecting with their shared values of qualitycomfort, and style
