Boardriders gets nod for Billabong

The Competition Commission has approved, with conditions, the acquisition of Australian surf-wear retailer Billabong by global apparel business Boardriders, formerly known as Quicksilver.

The Competition Commission has approved, with conditions, the acquisition of Australian surf-wear retailer Billabong by global apparel business Boardriders, formerly known as Quiksilver.

But commissioner Sipho Ngwema said on Wednesday the merging parties had claimed confidentiality, restricting the commission from releasing the value of the merger.

According to reports, Billabong first agreed to a A$197.7m ($155m) buyout from its top shareholder and major lender, Oaktree Capital Management, in January. Oaktree is a major shareholder in Boardriders, which together with its subsidiaries designs and distributes branded apparel, footwear and accessories.

Billabong operates in over 100 countries, including SA, and the merger will enable Boardriders to add brands such as Billabong, RVCA, Element and Xcel to its stable, which already boasts the Quiksilver, DC Shoes and Roxy brands.

GLOBAL BRANDS

“Both companies have strong global brands and Billabong has a good following in SA. Merging should help create synergies and hopefully strengthen their competitive position in the highly competitive global brands market,” Mergence Investment Managers portfolio manager Peter Takaendesa said.

The Competition Commission placed a moratorium on job losses as an approval condition of the merger.

“It is a blanket moratorium on retrenchments to prevent any retrenchments resulting from the merger,” Ngwema said.

The commission stipulated that in the event that jobs losses are unavoidable when the duration of the moratorium lapses, the merged entity must institute a workplace committee to help identify potential alternatives to avoid job losses.

The commission added that any details of plans affecting employment or operations be provided to workers and their union a year before the moratorium ends.

“It is put in place to discourage businesses from merging just for the sake of reducing headcount but for the benefits of the merger to be broad in nature” said Takaendesa.