The Australian Financial Commission (AFC) has heard a “major deal” is under way to sell Nike’s share of the Australian footwear business to adidas for about $2 billion.
Adidas has made a proposal to the Australian Competition and Consumer Commission to buy up to 60 per cent of the footwear business, with a proposal for the remaining 20 per cent to be sold to a third party.
AFC chairman Michael Kirby told the ABC the proposal would not be for sale for another six months.
“We haven’t made a decision,” he said.
Mr Kirby said the commission would have to review the proposed transaction as part of its investigation.
In an earlier submission to the commission, Nike said it was looking to buy a large number of Australian brands.
Nike would not comment on the nature of the proposal.
Under the proposed deal, the Adidas-owned brand would retain a 20 per-cent stake in the Australian Footwear Company (AFTC), and the Australian Brand Council would continue to be a significant player in the industry.
The company also said it would retain the Australian Sports Brand Council’s leadership role, and it would remain involved in “all aspects of the organisation”.
Nike is looking to sell more than 80 Australian brands, including Nike, Adidas and Reebok, to the European-based sports company Adidas.
The sale would give it a larger share of Australian footwear market than Nike currently owns in Asia.
Nike’s deal with the European sportswear giant is valued at about $4 billion.
The European company has a large presence in Australia and is the dominant force in the footwear industry in Europe.
“Nike will continue to make products for our consumers around the world, including on the Australian market,” the company said in a statement.
At the same time, the Australian Government would remain a key partner in the global sports and apparel industry, it said.
“It is expected that we will continue working with the Australian government and other stakeholders to support the growth of our global brand and support the continued development of the AFATC and the AFL as a global sporting organisation.”AFC has asked the Australian Securities and Investments Commission (ASIC) to look into the proposed acquisition.
ASIC’s investigations are part of a wider investigation into corporate governance, corporate governance practices and market-making in Australia.