The UK's Office of Fair Trading said it has cleared Nike Inc's proposed purchase of Umbro PLC. The anti-trust watchdog said that in the UK, Nike and Umbro do overlap in the supply of athletic apparel — including replica football kit — sports footwear and equipment, and both also bid to secure kit (sports licensing) deals with football teams. However, in most sectors, the overlap is low.
The OFT said that while the companies do have a high combined market share – over 45 percent – in replica kit sales, it found that this “overstates the rivalry between them.”
“Club kits and England kits are not significant competitive alternatives, and Umbro's leading position is principally based on its England kit deal, while Nike's sales derive from its club kit deals,” said the OFT.
The OFT also considered the issue of collusion, given that in 2003 it had fined Umbro and other members of a price-fixing cartel in replica football kit around the time of Euro 2000. But it ruled out concerns that placing Umbro under Nike's control would make tacit or explicit collusion between rivals more likely.
“The OFT has decided that the merger raises no competition concerns in any market, “the OFT concluded.
Last October, Nike bid 285 million pound($565 million) for Umbro.Umbro shareholders will vote on the offer at their Jan. 31.