Facing tariff headwinds to buy the dip! 3G Capital agrees to acquire Skechers for $9.4 billion, a 30% premium

3G Capital returns to the M&A battlefield, plans to acquire Skechers for $9 billion. After years of silence, Brazilian investment group 3G Capital is back in action. According to the Financial Times on Monday, the investment firm that previously partnered with Buffett to facilitate the Kraft Heinz merger has agreed to acquire the American footwear company Skechers for approximately $9.4 billion in cash. The deal offers Skechers shareholders two options: a full cash buyout at $63 per share (a nearly 30% premium over last Friday's closing price), or $57 in cash plus a portion of equity in the parent company after privatization—this approach of allowing common shareholders to retain equity is uncommon in privatization deals, demonstrating 3G's confidence in Skechers' long-term growth prospects. Although 3G Capital is known for acquiring companies to dominate the industry by purchasing competitors, sources close to the investment firm indicated to the media that it is more likely to focus on internal expansion for Skechers rather than achieving growth through acquisitions. The report states that the transaction is expected to be completed in the third quarter of this year and has received unanimous approval from Skechers' board of directors. Additionally, Robert Greenberg, the CEO who founded Skechers in 1992, will continue to lead the company, and his son Michael Greenberg will also retain the position of president, with the company headquarters remaining in California. Tariff policies pressure the footwear industry, Skechers faces survival threats Due to most of its production bases being located in Asia, Skechers has been severely impacted by tariff policies. Relevant data shows that in 2024, the U.S. market will account for 38% of Skechers' global sales, while places like Vietnam provide most of its manufacturing capacity. Skechers' securities filing released last Friday indicated that the Trump administration's tariff policies "pose significant risks to our business operations," potentially leading to declining profit margins, rising shoe prices, and reduced consumer demand. In the first-quarter financial report released at the end of last month, despite achieving a record sales figure of $2.41 billion, the company has withdrawn its full-year performance forecast, attributing it to "macroeconomic uncertainties caused by global trade policies." Last week, Skechers also signed a letter to the U.S. president along with major U.S. footwear companies, calling for an exemption of footwear products from "reciprocal tariffs." The letter warned that U.S. footwear retailers face a "survival threat" and will have to bear "tariffs exceeding 150% to nearly 220%." It also mentioned that retailers have been forced to suspend orders, and "U.S. consumers' inventory may soon be insufficient."