Kit-supplier Umbro is extending its sponsorship of French Lyon and grabbing a 49-percent share in its French licensee, Noel Soccer.
The move to grab a stake in Noel Soccer is similar to one in February in which Umbro reached an agreement to increase its equity stake in Team and Sports, a China licensee.
Umbro chief executive Peter McGuigan said the importance of the move's in France are underscored by that nation being the company's largest international market.
"France is Umbro's largest international market and our partnership with our most successful licensee," McGuigan said. "Coupled with our sponsorship of France's most successful football team, (this) ensures that Umbro is well-positioned for future growth in this market."
Umbro is paying GBP 5.9 million for a 36 percent stake in Noel Soccer, and has made a shareholder loan of GBP 2.17 million which will be converted into equity and give Umbro a 49 percent stake overall. The deal also provides for an additional GBP 4.07 million payment over the next six years if Noel Soccer achieves sales and profits growth targets.
The two sides, who have been collaborators since 1993, also have extended a distribution agreement to 2020. Umbro's popularity in France also cannot be hurt after extending its sponsorship of Lyon, which clinched its six consecutive title, until 2013. Umbro has a market value of GBP 241 million and posted pre-tax profits of more than GBP 26 million on revenues of almost GBP 150 million for 2006.