CVC in Talks to Buy Birkenstock for About $5 Billion — Business Report

By Adriana Anastasiades Tuesday, January 19, 2021

Birkenstock, a historic German shoe manufacturer, is in advanced talks to be sold to a private equity firm CVC Capital Partners, Bloomberg reports.

Advanced Business Negotiations

According to the report, CVC and Birkenstock family owners are in advanced negotiations for a sale of the legendary German business. Including the debt, the entire business deal is expected to be worth around €4 billion ($4.85 billion). The report notes that no final decision has been made yet but talks are in “advanced stages.”

The legendary German fashion brand business was founded back in 1774 by Johann Adam Birkenstock to produce shoes that support and contour the foot. However, the brand received worldwide popularity when it launched its first athletic sandals in the 1960s. This is the time when Birkenstock started selling its products in the United States (US) as the company’s products are now available in over 90 countries worldwide.

According to Bloomberg, the footwear company sold almost 24 million pairs of shoes in its fiscal year to end-September 2019. As a result, sales rose 11% to €721.5 million ($875.1 million).

If the deal is successfully concluded, CVC will expand its exposure to European fashion brands as it already owns Breitling, a Switzerland-based luxury watchmaker, as well as German perfume and cosmetics retailer Douglas GmbH.

CVC Capital Partners is also in talks to sell its composite-resins business AOC for about $2 billion. This news may surprise some as CVC acquired AOC in May 2018 looking to increase its portfolio of resins operations.

“AOC is an outstanding business with an experienced management team and world class manufacturing facilities. We believe that its combination with Aliancys will create a robust global company with the diverse product mix and exceptional geographic reach to serve markets in every corner of the world. We look forward to working with both AOC and Aliancys to continue to develop high performance composite resins,” said at the time Steven Buyse, Partner at CVC.

Industrial resins are in demand amid the pandemic outbreak. These products are used for the protection of all kinds of materials. Recently, Covestro AG acquired Royal DSM NV’s coatings additives unit for €1.6 billion ($1.94 billion).

Summary

CVC Capital Partners and Birkenstock are in advanced negotiations for a sale of the German footwear business for about €4 billion ($4.85 billion).

About the Author


Headshot for author Adriana Anastasiades

Adriana is a Journalist with a passion for reporting on business leadership, with a diverse interest in multiple industries.

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