What Market Watchers Are Saying About Skechers’ Blockbuster $9B Deal — The Biggest Shoe Buyout In History
Skechers‘ $9 billion go-private deal with Brazilian private-equity firm 3G Capital — the biggest shoe buyout in history — captivated market watchers around the world on Monday.
The blockbuster move is a reflection of the business prowess of Robert and Michael Greenberg, the father-son duo that has taken the company from family startup to global powerhouse during the past three decades. The deal — struck in the midst of U.S. President Donald Trump’s dramatic global trade war — comes at a time when the footwear industry, which is heavily exposed to China and other Asian production hubs, is under intense pressure.
Skechers said that its senior management team will lead that transition alongside 3G Capital. The company will continue to be led by chairman and chief executive officer Robert Greenberg, president Michael Greenberg, and the rest of the current management team. Skechers will remain headquartered in its hometown of Manhattan Beach, Calif. The deal is expected to close in the third quarter.
“Robert and Michael have done a phenomenal job with Skechers,” said Gilbert Harrison, chairman of investment banking advisory firm Harrison Group and chairman emeritus of the investment banking firm he founded Financo Inc. Harrison noted that Skechers is run as a “very entrepreneurial business,” and having the team retain a stake also ensures that they remain with the company. “Without the team that [Skechers] has, the business would be worth significantly less,” the banker concluded.
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Following the acquisition news, Skechers shares spiked more than 24 percent on Monday in Big Board trading, closing at $61.39.
The deal is estimated at $9.26 billion, based on a Form 13(D) filed on Monday with the Securities and Exchange Commission listing the total outstanding Class A and Class B Common Stock shares as of May 2. The shares outstanding could change by the time the deal closes, and there are typically adjustments made to the purchase price, such as the valuation of inventory and any outstanding debt. (The deal’s current value reflects a nearly 30 percent premium over the stock price from Friday’s close at $49.37 a share.)
3G Capital, which agreed to acquire Skechers for $63 a share, was founded in 2004 by Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Herrmann Telles. It includes in its portfolio consumer brands Kraft Heinz, Burger King, Tim Horton, and Hunter Douglas.
The structure of the transaction gives existing Skechers shareholders the option of receiving $57 per share in cash and one unlisted, non-transferable equity unit in a newly-formed entity that will become the parent of Skechers when the deal closes.
TD Cowen retail analyst John Kernan described the deal as a “landmark sector deal in terms of size,” which he expects will close as the Skechers’ board has already given its approval and the Greenberg family owns 60 percent of the voting rights.
“We believe this is the largest deal in softlines retail sector history,” Kernan wrote in a research note on Monday. “The most recent deal was Reebok at $2.5 billion, or 1.1 times sales.”
Kernan also said the transaction highlights “opportunistic investing in the sector during a time of uncertainty, with sector valuation multiples near five-year lows,” adding that he is skeptical of another bidder stepping up due to both size and scope of the deal. Moreover, he reasoned that the uncertainty on the multi-year margin outlook due to tariffs probably creates little opposition.
Noting 3G’s playbook of boosting margins through cost-cutting and efficiencies, Kernan said the likelihood is that “we will see Skechers come public again in the distant future.”
Needham & Co.’s Tom Nikic described the deal as “very surprising,” as Skechers has always been viewed as a “family business,” with several family members working at the company.
However, Robert Greenberg, who is 85, has been running the company he founded for 33 years, the analyst noted, adding that the decision to sell “may have been accelerated by the macro environment, [such as] tariffs, consumer sentiment, China-U.S. relations, etc.,” as the company may have wished to navigate the challenges without being under Wall Street’s scrutiny.
Nikic also doesn’t forsee another buyer swooping in with a competing bid, noting both the large purchase price required and the “somewhat adversarial relationship Skechers has had with their larger peers,” noting that both Nike and Adidas in recent years have filed lawsuits against the company.
Looking at the company’s operations, Nikic said: “We believe Skechers is a great business, but it faces near-term headwinds both fundamentally and sentiment-wise. Specifically, they face significant headwinds from tariffs on important footwear.”
He cited China as a problematic market, and North America retail as becoming more volatile. In addition, gross margins are no longer expanding like they were in 2023 and early-2024, the analyst said. One possible bear case scenario centers are tariffs growing worse, resulting in U.S. consumer sentiment deteriorating and Skecher’s international business potentially suffering due to anti-American sentiment against the trade war backdrop.
According to James Duffy at Stifel, 3G Capital will finance the deal through cash on hand and a debt financing commitment from JPMorgan.
Upon completion of the transaction, the company’s common stock will no longer be listed on the New York Stock Exchange, and Skechers will become a private company.
Skechers noted that this transaction, which was unanimously approved by its board of directors, including an independent committee of independent directors, is a “transformational long-term partnership opportunity” for the shoe company to “further evolve” in both lifestyle and performance footwear.
Robert Greenberg said in a statement that this move comes as Skechers has “experienced tremendous growth” over the last three decades.
“With a proven track-record, Skechers is entering its next chapter in partnership with the global investment firm 3G Capital,” the CEO said. “Given their remarkable history of facilitating the success of some of the most iconic global consumer businesses, we believe this partnership will support our talented team as they execute their expertise to meet the needs of our consumers and customers while enabling the company’s long-term growth.”
Alex Behring, co-founder and co-managing partner, and Daniel Schwartz, co-managing partner, of 3G Capital, added in a joint statement that they are “looking forward to working with the Skechers team.
“We have immense admiration for the business that this team has built, and look forward to supporting the company’s next chapter,” Behring and Schwartz said. “Our team at 3G Capital is built to partner with companies like Skechers.”
This comes as the footwear company reported net sales in the first quarter of fiscal 2025 of $2.41 billion, a 7.1 percent increase from $2.25 billion the same time last year.
But while sales were high, net earnings dipped in Q1 to $202.4 million and diluted earnings per share were $1.34, a 2.0 percent decline compared with prior year net earnings of $206.6 million and diluted earnings per share of $1.33 in Q1 2024.
