Probably should have posted this from the start. My apologies if I'm not supposed to paste this sort of thing...
The full release, from Rueters:
PARIS, March 22 (Reuters) - Loss-making French ski maker Skis Rossignol agreed on Tuesday to be bought by U.S. surf clothes maker Quiksilver for 241 million euros ($318 million), creating the world's biggest maker of outdoor clothing and equipment.
The merger of sea and snow will be accompanied by 134 job cuts at Rossignol, which predicted a heavy loss for the financial year to March 31 as it restructures to cope with disappointing winter sales, overcapacity and a weak dollar.
The deal is a rare foray by a U.S.-listed company prepared to defy the weak dollar by buying corporate assets in the euro zone, although private equity activity continues to bubble.
"Our ambition is to represent in outdoor (gear) what Nike and Adidas represent for team sports, with brands that kids will fight to get their hands on," Quiksilver Chairman Bernard Mariette told a news conference.
Founded in Australia in 1969 with the invention of board shorts that stayed on in the surf, Quiksilver said on Tuesday it had agreed to buy a majority stake in Rossignol from the controlling Boix Vives family, paying with cash and shares.
The family owns 45 percent of Rossignol's capital and 63 percent of its voting rights.
Quiksilver would then offer cash for the remaining capital at 19 euros per share. In all, Quiksilver is paying 241 million euros and assuming 120 million euros in debt.
The deal will leave the Boix Vives family with a 1.5 percent stake in the new firm, to be called Quiksilver Rossignol.
The bid offers the slimmest possible 0.1 euro per share premium to Monday's closing price of 18.9 euros, but takeover talk had already pushed Rossignol to a seven-year high of 19.1 euros in recent weeks following Quiksilver's initial approach.
Some analysts considered the price generous.
"We had estimated the price at 18 euros which in our opinion was a quality valuation for the group given the deterioration in its fundamentals over 2004/05," said Caroline Barbery at Fortis Securities.
But Mariette, who said the deal offered shareholders a 40 percent to 45 percent premium over Rossignol's share price before speculation rallied its stock, rejected suggestions he had overpaid.
"The price is fair, more than fair for the shareholders of Rossignol and of Quiksilver," he told Reuters, adding that the two firms had been in talks for a year.
Quiksilver shares fell 5.7 percent in early U.S. trading to $31.28.
Rossignol said late snow had affected orders for new lines, especially in Japan, while snowboard sales had fallen and weakness persisted in the rollerblade market.
Facing overcapacity in its core ski business and increased competition from China, Rossignol is also exposed to the weak dollar as a large chunk of its sales are in the United States.
Rossignol said factories would be reorganised and jobs would be affected, but it would do its best to avoid firings. "The amount of provisions is currently being worked out," it said.
Rossignol Finance Director Francois Chauvet said 134 jobs would go, mainly through retirements and normal departures.
"We would have had to do the restructuring anyway but with financial means that were not the same," added Laurent Boix Vives, Rossignol's supervisory board chairman.
The deal will boost Quiksilver's earnings from 2006.
Calyon banker Christophe Marchand, who advised Quiksilver on the deal, told Reuters that benefits would derive from revenue rather than cost savings. "Quicksilver is buying a company in recovery," he said.
The deal will lift sales at the new firm to 2.8 billion to 3.4 billion euros in five years' time from 1.9 billion now, and Mariette said he intended to match Rossignol's operating margin -- 4.8 percent in 2003/04 -- to Quiksilver's 10.4 percent level.
Skis Rossignol leads the world's winter sports goods market with its Rossignol, Look and Dynastar brands.
Rossignol shares, which Euronext said would remain suspended for now, closed at 18.89 euros on Monday, valuing it at 235 million euros ($310 million) and 48 times projected annual earnings, based on analyst estimates collected before the new restructuring news, according to Reuters data.
That compares with a multiple of about 17 times forward earnings for Rossignol rival Adidas-Salomon