Easton selling divisions, Bauer Performance Sports rumored to buy baseball/softball

[DigiV 6]

Why not join forces with Warrior or something? God, i hope Bauer doesn't gobble up the Hockey division.

[Chadd 916]

Having personally been through a couple of business transactions that had to be approved by Canada's Federal Competition Bureau, all I can say is that if Bauer and Easton want it to happen, it will eventually happen. Worst case is that Bauer is forced to divest itself of some irrelevant/immaterial part of their hockey business.

Simply removing a competitor from the market would be enough to cause a potential problem. IF hockey were to be involved, Easton would likely have to shut it down and structure that part as an asset sale to avoid any issues. That way Bauer was not responsible for the elimination of a competitor.

As JR mentioned though, rumors have been floating around about one company buying another in this industry for as long as I have been involved in it. At one point or another just about everyone has been rumored to be purchasing everyone else at some point. It's just disappointing to see the industry continue to consolidate and offer fewer options to consumers and retailers.

[shooter27 116]

Simply removing a competitor from the market would be enough to cause a potential problem. IF hockey were to be involved, Easton would likely have to shut it down and structure that part as an asset sale to avoid any issues. That way Bauer was not responsible for the elimination of a competitor.

That really depends on if the deal materially changes market power/market share. On the surface, yes going from four major competitors to three (a 25% reduction) looks like a big competitive shift. But, when it comes to anti-trust regulation the decision whether to challenge or not lies more in the respective market share of the top companies and how the transaction affects that market share and market power. It's not simply a matter of the FTC looking at the industry and saying, "Well, there were four major companies, this cuts it down to three, we should investigate." It's more nuanced than that and depends on both the current market shares (of all of the top four competitors) and how they shift after the transaction. There are a variety of numerical measures of market share and market power (none of them being perfect) that are used for something like this. I can't speak for Canada, but since both companies are headquartered in the US, I think the FTC would have jurisdiction if it were to happen.

EDIT: Here's some text about the numerical formula from an NYT article on the blocked ATT Wireless, T-Mobile deal (full article here: http://www.nytimes.com/2011/09/10/business/att-and-t-mobile-merger-is-a-textbook-case.html?pagewanted=all)

"The antitrust division has long published explicit guidelines that tell companies which mergers it is likely to block as anticompetitive.

The analysis begins with a mathematical formula for calculating the deal’s effect on competition. It’s called the Herfindahl-Hirschman Index, or HHI, a phrase you may want to drop at your next dinner party if you want to bring conversation to a halt.

Although the formula looks slightly complicated, it’s derived from the common-sense principle that the more competitors in a market, the lower the prices and the greater the innovation. In short, more competitors means more competition, which benefits consumers.

The Justice Department has officially used HHI since 1982, and the guidelines were revised by the Obama administration in 2010. Mr. Hovenkamp notes that despite tougher antitrust rhetoric from President Obama, the revision actually made it easier for proposed mergers to pass muster. Without getting too deeply into the math, industries can be scored on a scale up to 10,000, with 10,000 being a perfect monopoly. During the Bush administration, an HHI score of 1,800 or higher was deemed a concentrated industry, and a merger that increased the score by more than 100 points in such an industry was presumed to raise anticompetitive concerns. The new guidelines raised those numbers to 2,500 and 200."

The HHI calculation is the sum of the squares of the market shares of the top 50 firms in the market.

[Chadd 916]

Very familiar with the HHI, surprisingly enough, as the company I work for just merged with another company and the DoJ filed suit to stop it. In that case, they used a much more aggressive interpretation of the HHI than had ever been used in the past. That experience (and all the research I did on that), along with their other actions of late, lead me to believe that they would take a long hard look at the situation. The fact that Bauer is significantly larger than the other "majors"(some would argue that Bauer is larger than the rest of the market combined), I would have to believe that the projected numbers would be significant.

[shooter27 116]

Certainly possible. I really don't know the market shares of the respective competitors, so I was just pointing out that simply cutting from four main competitos to three doesn't necessitate anti trust investigation.

[DarkStar50 679]

This is fun..............just wait until a few of the big retailers choke on their accounts payable..............with just a few vendors waiting to be paid...........then what................

[JGraz15 53]

Anyone on the 'inside' hear any updates to this?

[JR Boucicaut 3759]

Yeah. LOL

[PMurphy17 25]

Anyone on the 'inside' hear any updates to this?

The fact this got out in the first place was suprising. Bauer is very good at keeping quiet about acquisitons. The cone of silence has be in place since the story was reported. I would expect the next news anyone hears is; the deal is done or it fell apart.

[shooter27 116]

The fact this got out in the first place was suprising. Bauer is very good at keeping quiet about acquisitons. The cone of silence has be in place since the story was reported. I would expect the next news anyone hears is; the deal is done or it fell apart.

It hasn't been that quiet, you just need to know where to look. A hockey board isn't the best place to find out about the strategic intentions of a publicly traded company. That is especially true when it's rumored to be in negotiations with a non-hockey brand. And, if we're being fair, it's probably time to stop calling Bauer Performance Sports a "hockey company" since when you look at the number and variety of it's acquisitions it's more appropriate to call it a sports equipment conglomerate with Bauer Hockey as the hockey-specific brand under the BPS umbrella. It used to be a hockey company, today it's much more.

[JR Boucicaut 3759]

Just received confirmation from several sources that a deal's been reached for baseball/softball. Nothing on the hockey side of things.

[chippa13 1844]

Interesting. I wonder if whoever ends up with hockey carries on the Easton name there.

[JR Boucicaut 3759]

They wouldn't. The name belongs to BPS.

[JR Boucicaut 3759]

Here's the presser - http://www.marketwatch.com/story/lynden-energy-named-to-tsx-venture-50-2013-02-13-16173124?reflink=MW_news_stmp

[beerleaguecaptain 999]

They wouldn't. The name belongs to BPS.

From the article: "At closing, BPS will enter into a license agreement to permit Easton-Bell Sports to use the EASTON name in hockey and cycling only."

So they would still produce hockey gear under the Easton name.

[PMurphy17 25]

Easton hockey really can only get sold for parts as long as Bauer is licensing the name back the brand to Easton.

Just checked my calendar and it says the year is 1996 and there are only 2 big brands. The difference now is when one of these guys slips up there is no itech or easton to fill the void. The gap between 2 and the rest could be called the grand canyon.

[chippa13 1844]

Well, they are licensing the Easton name to Easton-Bell for the hockey line so we'll probably continue to see the Easton name on hockey until at least sale of hockey division plus 1 year.

[iceman8310 103]

whos going to buy the hockey?

[PMurphy17 25]

Well, they are licensing the Easton name to Easton-Bell for the hockey line so we'll probably continue to see the Easton name on hockey until at least sale of hockey division plus 1 year.

What are they selling though if they don't own the name, sounds almost like a patent/technology sell off.

[ridindirty 11]

I don't see how this is good at all.

[Fishing1 0]

So easton is still making hockey gear

When will bauer come out with there first baseball gear

[beerleaguecaptain 999]

I don't see the consumer seeing much a difference here - at least for a while. You will still see Easton bats and gloves. It makes little or no sense to sell Bauer baseball gear. You will still see Easton hockey gear for the foreseeable future. Will that change, perhaps, perhaps even likely but not right away.

[ridindirty 11]

If they are licensing the Easton name for hockey, how is it not just a matter of time until the hockey division is sold... At which point the name stays at BPS.

Trend here, unless I'm missing something, is large conglomerates buying smaller brands with no ancillary gain for the consumer involved.

[beerleaguecaptain 999]

If they are licensing the Easton name for hockey, how is it not just a matter of time until the hockey division is sold... At which point the name stays at BPS.

Trend here, unless I'm missing something, is large conglomerates buying smaller brands with no ancillary gain for the consumer involved.

Why do you assume the licensing agreement cannot transfer with a new ownership group?

[ridindirty 11]

I'd have to see some proof in the market of rivals currently letting this happen before I'd assume it's a possibility. I think it's much safer to assume that won't happen than it will.

I don't post all that often but from my limited time here it seems like Shooter might have some insight.