Samsonite is buying Tumi in a $1.8 billion deal that will bring together two of the best-known names in luggage and office bags, the Wall Street Journal reported.
While Samsonite has talked about buying Tumi, which focuses on high-end office bags and backpacks, since at least 2012, an acquisition has now become more affordable after Tumi sales growth eased amid China’s economic slowdown, according to Bloomberg. Earlier this week, Tumi shares fell to $15.49, their lowest since going public in 2012. They jumped to $26.21 on Thursday amid news of Samsonite’s $26.75-per-share bid.
Buying Tumi, which had revenues of $548 million in 2015, will give Samsonite entree into the higher-priced, higher-margin market the New Jersey company reaches through its 100 stores and high-end department stores, the Journal said. An analyst cited by Bloomberg said Tumi could expand to 500 stores around the world.
“The team at Samsonite has a long and successful track record when it comes to acquisitions and we know they will be excellent stewards of the Tumi brand,” Tumi CEO Jerome Griffith said in a press release. “Samsonite will bring Tumi to new and growing markets.”
Samsonite, founded in Denver, based in Luxembourg and listed in Hong Kong, had sales of $2.4 billion in 2014. First six-month 2015 sales were $1.2 billion. It bought American Tourister in 1993 and smaller brands in 2012 and 2014.
“This is a transformational acquisition for Samsonite,” CEO Ramesh Tainwala said in the release announcing the two companies’ agreement and a second-half of 2016 closing target. “It will meaningfully expand our presence in the highly attractive premium segment of the global business bags, travel luggage and accessories market.”