Fortune Brands to sell Golf Division (Acushnet)

[jman2407]

Rumor Mill-

 

I heard today from some inside sources that Fortune Brands is currently looking to sell off their golf division, Acushnet Golf (Titleist, FootJoy, Cobra, Pinnacle, Scotty Cameron).

 

Nike is claimed to be the suitor with an announcment to be made sometime shortly after the PGA Show--February 2009.

 

Anyone else heard this or have any additional details???

[2zlinks]

On the surface it doesn't make any sense for Nike to make a play for Acushnet. Nike is becoming more entrenched in the golf industry and is being seen as a viable golf company by more and more of the public. On the other hand if they did buy them they wouldn't have to worry about Tiger gaming someone elses putter, because lets face it he is never going to change anyway. I'm not buying it, probably a rumor started by.......Calloway. :rolleyes:

[hef63303]

Rumor has been around for a while. It owuld not be typical Fortune Brand style. They tend to sell when the company has the most value. I would say that Titleist's value is down a little right now due to the lawsuit settlements, etc. and with golf being in a downward swing.

[jman2407]

IMO it actually makes a ton of sense for Nike to buy Acushnet.

 

Nike currently has all of its premium and mid-tier balls made by Bridgestone. This acquisition would help Nike to make a bigger push in the ball market and would no longer require Nike to outsource its ball production to another company. All of the profits could be kept in-house.

 

And with Nike's marketing budget they could help blow the Acushnet brand (Nike brand) up to a pinnacle never seen in golf by one company.

 

Guess we will just have to wait and see.

[BEND OF THE RIVER GC]

IMO it actually makes a ton of sense for Nike to buy Acushnet.

 

Nike currently has all of its premium and mid-tier balls made by Bridgestone. This acquisition would help Nike to make a bigger push in the ball market and would no longer require Nike to outsource its ball production to another company. All of the profits could be kept in-house.

 

And with Nike's marketing budget they could help blow the Acushnet brand (Nike brand) up to a pinnacle never seen in golf by one company.

 

I can see the new slogan now, "How do YOU mark your Pro Platinum?"

[MchSt805]

IMO it actually makes a ton of sense for Nike to buy Acushnet.

 

Nike currently has all of its premium and mid-tier balls made by Bridgestone. This acquisition would help Nike to make a bigger push in the ball market and would no longer require Nike to outsource its ball production to another company. All of the profits could be kept in-house.

 

And with Nike's marketing budget they could help blow the Acushnet brand (Nike brand) up to a pinnacle never seen in golf by one company.

 

I can see the new slogan now, "How do YOU mark your Pro Platinum?"

Haha, I was also wondering hypothetically here then...would Scotty's name be accompanied by a swoosh? Or would Titleist still remain the parent name in that operation?

[DemolitionMan]

The problem with this rumor is Adidas would not sit back and let Nike take Acushnet without a bidding war. Even Callaway, although they don't have nearly the same money, would be chomping at the bit to get that purchase and make every effort. I just don't see a sale anytime soon. As another poster pointed out, it's not like FO to sell out at the bottom of the curve.

[duffer888]

Not surprising at all, actually. Going into a period of recession and Acushnet doesn't have the financial clout to devote $$ to marketing and product development like the big sports guys, Adidas and Nike. It also reinforces my belieft that their cash cow, ProV1, is now no better than the competition.

[golfhut]

Nike outsources everything. Why would they buy manufacturing facilities? Who would they sell the plants to? Also, a few months ago Acushnet announced they were building a ball manufacturing plant overseas, I believe it was China. What would they do with FootJoy, sell it off, add another line of shoes, gloves and outerwear?? I cannot see Nike buying another line and keeping the old name.

[Drucurtis]

Nike outsources everything. Why would they buy manufacturing facilities? Who would they sell the plants to? Also, a few months ago Acushnet announced they were building a ball manufacturing plant overseas, I believe it was China. What would they do with FootJoy, sell it off, add another line of shoes, gloves and outerwear?? I cannot see Nike buying another line and keeping the old name.

 

 

Why would they buy manufacturing facilities? So they don't have to oursource everything. A ball manufacturing plant is exactly that, it can manufacture golf balls, no matter what name is printed on them (nike, titleist, etc.). A shoe factory does not produce only one brand of shoes, it manufactures shoes...Nike, Footjoy, etc.

 

Why wouldn't Nike buy other lines and keep the name. Instead of losing market share to them, they would profit from their sales. If this is true and a deal is reached, this would be (in theory and on paper) a great deal for Nike.

[jwfgolfpro]

Rumor Mill-

 

I heard today from some inside sources that Fortune Brands is currently looking to sell off their golf division, Acushnet Golf (Titleist, FootJoy, Cobra, Pinnacle, Scotty Cameron).

 

Nike is claimed to be the suitor with an announcment to be made sometime shortly after the PGA Show--February 2009.

 

Anyone else heard this or have any additional details???

 

 

Common knowledge out on Tour that Wally Uihlein was trying to put together investors to buy Titleist from Fortune Brands months ago.

 

JWF

[tbowles411]

Nike outsources everything. Why would they buy manufacturing facilities? Who would they sell the plants to? Also, a few months ago Acushnet announced they were building a ball manufacturing plant overseas, I believe it was China. What would they do with FootJoy, sell it off, add another line of shoes, gloves and outerwear?? I cannot see Nike buying another line and keeping the old name.

 

 

Why would they buy manufacturing facilities? So they don't have to oursource everything. A ball manufacturing plant is exactly that, it can manufacture golf balls, no matter what name is printed on them (nike, titleist, etc.). A shoe factory does not produce only one brand of shoes, it manufactures shoes...Nike, Footjoy, etc.

 

Why wouldn't Nike buy other lines and keep the name. Instead of losing market share to them, they would profit from their sales. If this is true and a deal is reached, this would be (in theory and on paper) a great deal for Nike.

This would help retain jobs in a down market. Actually a savvy business and public relations move if it were to happen. They'd further improve the Nike brand lightyears in one fell swoop.

[kiwidave]

Nike outsources everything. Why would they buy manufacturing facilities? Who would they sell the plants to? Also, a few months ago Acushnet announced they were building a ball manufacturing plant overseas, I believe it was China. What would they do with FootJoy, sell it off, add another line of shoes, gloves and outerwear?? I cannot see Nike buying another line and keeping the old name.

 

 

Why would they buy manufacturing facilities? So they don't have to oursource everything. A ball manufacturing plant is exactly that, it can manufacture golf balls, no matter what name is printed on them (nike, titleist, etc.). A shoe factory does not produce only one brand of shoes, it manufactures shoes...Nike, Footjoy, etc.

 

Why wouldn't Nike buy other lines and keep the name. Instead of losing market share to them, they would profit from their sales. If this is true and a deal is reached, this would be (in theory and on paper) a great deal for Nike.

This would help retain jobs in a down market. Actually a savvy business and public relations move if it were to happen. They'd further improve the Nike brand lightyears in one fell swoop.

 

No it wouldn't, they'd be made in Asia.

[Sean2]

Maybe we should all chip in and buy it. That way we can get our equipment for free. :-)

[Ham Solo]

Interesting.

[pukugolf]

Hi

 

Does anyone have an update here?

 

Cheers

[jman2407]

Looks like it was just a rumor. Looking back, I don't see why Fortune would spend all the money to showcase at the PGA show if they were getting ready to sell. Also, the announcement was supposed to happen around now if it were going to be made.

 

I will keep talking to my contacts, but for now I would say they are staying with Fortune.

[KevCarter]

Looks like it was just a rumor. Looking back, I don't see why Fortune would spend all the money to showcase at the PGA show if they were getting ready to sell. Also, the announcement was supposed to happen around now if it were going to be made.

 

I will keep talking to my contacts, but for now I would say they are staying with Fortune.

 

Hopefully you have found some smarter contacts! :lol:

 

Kevin

[buttuh]

Wouldn't you want to hype up your product before you sell it to get the most money? Or would you push it into oblivion and sell it for pennies on the dollar

Looking back, I don't see why Fortune would spend all the money to showcase at the PGA show if they were getting ready to sell.

[pukugolf]

Thanks for the update

 

I found this:

 

http://online.wsj.com/article/BT-CO-200812...l?mod=wsjcrmain

 

DOW JONES NEWSWIRES

Fitch Ratings lowered its investment rating on Fortune Brands Inc. (FO) one notch closer to junk territory, saying earnings declines brought on by problems in the housing market will weaken credit measurements as debt has risen this year.

 

The company is also in the golf and spirits businesses, and Fitch said results for those segments aren't likely to rebound soon for Fortune. The company is seeing increased competition on the alcohol front and softness for golf products.

 

Fitch lowered its ratings on Fortune by one notch to BBB, two steps above junk, and further downgrades are possible. But while noting the company should be able to cut debt and raise dividends next year, the operational weakness will loom large.

 

The company in October cut its fourth-quarter forecast to reflect the effect of the slowing economy. The home and hardware segment, which provides more than half of Fortune's revenue, saw third-quarter sales skid 20% as profit plunged 48%.

 

Fortune shares were recently up 30 cents, or 0.7%, at $40.74.

[MikeBabjak]

No surprises if it's sold, shut down, new owners driving it into the ground, or whatever. Nothing lasts forever.

[billybaroo]

General rule of thumb for industry rumors like these - if you hear about it it isn't going to happen.

 

Corporate M&A, especially for something as significant as this would have been, is a very tight lipped operation. There is an inner circle involved with the due diligence prior to any public announcement, anyone beyond that will be in the dark. SEC frowns upon M&A information being leaked.

[redking]

Getting back to the Nike rumour for a sec....

 

Nike does have a history of doing this. When Nike went headlong into hockey a number of years ago, they just went ahead and bought the biggest and best hockey company around - Bauer - and proceeded to use Bauer to manufacture Nike hockey equipment. Then they closed all the quality factories in Canada, moved producton to China, and all they make now is crap for the retail consumer.

 

Now that they have sold the hockey division to a private equity firm ($200M deal) they may be looking to reinvest in their flagship sport and top endorser - Mr. Eldrick Woods.

 

Don't know if $200M is enough to buy Titleist, but I could see them making a play here. Nike has long suffered the knock that they were not of the best quality, and this would give them instant credibility in terms of perceived quality. They could also run the 2 lines parallel to each other for a period of time, and then merge them into one brand in a few years, just like they did with Bauer. (If you remember, they kept up the facade that Bauer was a separate company for a long period of time before re-branding everything "Nike Bauer")

 

Just my 2 cents.

 

RK

[hef63303]

200 Million will not come close to buying Titleist. SRI paid $132 million for Cleveland Golf. Titleist/Cobra would go for somewhere around $1 billion. I would think that Fortune Brands would get rid of Footjoy at the same time, if they were to sell Titleist. So you are probably looking at $1.5 billion to get all 3 golf brands from Fortune Brands. In other words, don't hold your breath waiting on it to happen.