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Thursday, December 9, 2010

Giant Of Golf To Be Sold Off

Titleist/FootJoy To Be Sold Or Spun Off!

Back in March of this year…we got two pieces of information that were somewhat hard to believe at first glance…although our source was rock solid and we had already heard something might have been brewing.  The two pieces of info he gave us was that Cobra Golf was going to be sold to Puma and that Titleist/FootJoy/Cameron was going to be splitting up.  The first of which was confirmed only days later (Cobra/Puma).  Although the later was still up in the air at the time.

But over the following months more and more info surfaced that made us believe that this was also a real possibility.  Well today that sources info was confirmed...Fortune Brands owner of the Acushnet brand has announced that they WILL be splitting the company into possibly 3 separate businesses. In addition to their golf brands…they also own brands in the liquor sector and Home/Security sector as well.  Golf (Acushnet) being the smallest portion of their portfolio.
“Potential strategic buyers linked in the past have included Callaway (ELY: NYSE), Nike (NKE: NYSE), Adidas, Bridgestone and Sumitomo Rubber. However, all of these potential suitors present significant antitrust issues. Adidas and Nike, for example, are #2 and #3 respectively in golf footwear and acquiring FootJoy in the #1 position would imply a major advantage to the successful buyer. Callaway and Bridgestone are #2 and #3 respectively in golf balls and acquiring Titleist and its dominate #1 position in market share would equally set off a series of complaints from those that lost out in a potential deal. Similarly Callaway, Bridgestone and Sumitomo represent golf ball product category intellectual property right antitrust issues.
An alignment between Titleist and anyone of those three would give the combined entity 40+% of the golf ball Intellectual Property Rights landscape. Navigating through antitrust issues would slow up any sale process and could require divestitures. Although there would be some financial synergies with any strategic buyer, the antitrust risks and delay coupled with the integration costs could outweigh those benefits along with the tax consequences that may influence the final sales price.”  says Terry McAndrew of

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