Quiksilver to Buy Rossignol
SAM Magazine--Paris, France, Mar. 22, 2005--Quiksilver is buying a majority stake in Rossignol from the controlling Boix-Vives family for 241 million euros ($318 million), paying with cash and shares. The acquisition will create one of the world's biggest suppliers of outdoor clothing and equipment, to be called Quiksilver Rossignol. The two firms had been in talks for a year.
Rossignol forecasts a heavy loss for the financial year to March 31 and is in the midst of restructuring to cope with decreased winter sales, overcapacity and a weak dollar. The restructuring will include 134 job cuts, mostly through attrition, the company said. "We would have had to do the restructuring anyway, but with financial means that were not the same," Laurent Boix-Vives, Rossignol's supervisory board chairman, said in published reports.
Quiksilver chairman Bernard Mariette told a news conference, "Our ambition is to represent in outdoor (gear) what Nike and Adidas represent for team sports, with brands that kids will fight to get their hands on," according to Reuters. The acquisition could particularly benefit Rossignol snowboards and clothing lines, observers suggested to SAM.
Quiksilver expects the acquisition to boost revenues in the next five years from 1.9 billion euros to 2.8 to 3.4 billion ($3.7 billion to $4.5 billion). The company also expects to more than double Rossignol's operating margins, to 10.4 percent, matching Quiksilver.
Boix-Vives will remain as an adviser to both Quiksilver and Rossignol subsidiary Cleveland Golf, and will keep a direct stake of about 35 percent in Cleveland through 2009. \