The world's biggest luggage maker, Samsonite, has confirmed that it has agreed to buy luxury rival Tumi for 26.75 dollars per share in an all-cash transaction, as it looks to gain access to the premium end of the luggage market.
Tumi, which makes products ranging from rolling luggage to tablet cases and briefcases, has been valued at 1.8 billion dollars for the acquisition and the deal is expected to bring cost savings in sourcing, logistics, sales and marketing, as well as distribution and product development, according to both companies.
Hong Kong-listed Samsonite said it would finance the deal with bank loans and that the transaction was expected to close in the second half of the year subject to regulatory and shareholder approvals. Samsonite also added that the deal had been “unanimously approved” by the Boards of Directors of both companies.
Samsonite, chief executive, Ramesh Tainwala, said: “Tumi is a perfect strategic fit for our business. The brand is beloved by millions of loyal customers for its high quality and durable premium business and luggage products. We are excited about the tremendous opportunities this combination provides us to further diversify our product and customer portfolios.
“In particular, we will expand Tumi’s presence in Asia and Europe, while strengthening its business in North America, by leveraging our expertise in global distribution, sourcing, product design and technical innovation, especially in the area of lightweight hardside luggage.”
Samsonite to acquire Tumi for 1.8 billion dollars
Samsonite is already known as the world’s largest lifestyle bag and luggage company, this acquisition it states will help it transition itself into a global travel lifestyle brand, with Tumi’s premium end luggage complementing its own diverse portfolio of brands and products. In addition to its flagship brand, Samsonite also includes Hartmann, American Tourister, and High Sierra.
Tumi, chief executive, Jerome Griffith added: “The team at Samsonite has a long and successful track record when it comes to acquisitions and we know they will be excellent stewards of the Tumi brand. Samsonite will bring Tumi to new and growing markets, while still maintaining the high-quality Tumi is known for.
“This is a compelling transaction that delivers substantial and immediate cash value to our shareholders. Further, we are excited for our employees to benefit from opportunities presented by being part of a larger and more diversified global company. Samsonite has successfully grown many unique brands and we look forward to the next chapter in Tumi’s great history as part of the Samsonite family.”
Tumi has around 2,000 distribution points across 75 countries and the company saw net sales increased by 4 percent year-on-year in 2015 to 548 million pounds. North America accounted for 68 percent of those sales.