US giant Nike’s £285m (€394m) takeover of England kit manufacturer Umbro was today given the thumbs up by Sports World billionaire Mike Ashley.
Mr Ashley’s Sports Direct International, which owned 29.9% of Umbro’s shares, has agreed to sell two-thirds of its holding to Nike for £56.1m (€77.5m).
Sports Direct is using the proceeds from the deal to reduce debts. It has agreed to back Nike’s offer for Umbro with its remaining 10% stake.
A Sports Direct spokesman said the company had made a profit on the stake, although declined to confirm how much.
Nike said the acquisition of shares – at the same price as its earlier takeover offer – gave it a “strong platform” from which to proceed with its purchase of the iconic football brand.
Rival sportswear retailer JJB Sports also has a 10% stake in Umbro. JJB and Sports Direct are major customers of the kit maker, which has contracts with the England football team and several Premier League outfits.
Nike has given assurances to the Football Association over Umbro’s England contract, which runs until 2014, while Umbro has previously said it believed retailers should not be worried by the change of ownership.
The Cheadle-based firm backed Nike’s approach in October because it gave it “significant financial and brand firepower”.
The Umbro name will join Nike’s portfolio of affiliate brands, which also include Converse, Nike Bauer Hockey and Nike Golf.
Half of Umbro’s revenues come from the sale of football kit, balls and equipment, with the rest from more general lifestyle products.
Umbro, which was founded in 1924, has worked with the FA since 1984. As well as providing all playing and training kit for various England teams, Umbro holds the rights to the sale and distribution of England replica kit.