Street View: Skechers' deal to be smooth sailing despite tariff volatility

Skechers USA

06/05/2025 12:34

** Popular shoe brand Skechers SKX.N has agreed to be taken private by 3G Capital for $9.42 billion, exiting public markets after 26 years, as it grapples with impact of U.S. tariffs

** Deal marks footwear industry's biggest buyout to date

** SKX shares marginally down premarket

NO REGULATORY HURDLES EXPECTED

** Deutsche Bank ("hold," PT: $63) sees deal as positive for SKX and expects buyout to provide valuation support for other brands; sees it as potential driver for M&A among other undervalued global names with international growth potential

** Raymond James ("market perform") does not expect regulatory hurdles from FTC hindering deal as 3G does not own major softlines assets; notes potential of friction with Trump administration as 3G's roots are based in Brazil

** "We believe the surprise announcement signals a confidence from the private equity industry that tariff-related headwinds are not insurmountable when ascertaining the long-term success of global brands," brokerage says

** Barclays ("equal weight," PT: $63) sees no fundamental anti-trust risk preventing deal

** Morgan Stanley ("overweight," PT: $73) says while offer price may strike as low relative to recent levels, it is fair due to co's exposure to tariff volatility

** Needham ("hold") says decision may have been accelerated by macro climate as SKX "may wish to navigate these challenges without being under the Street's scrutiny"

 (Reporting by Kanchana Chakravarty in Bengaluru)

 ((Kanchana.Chakravarty@thomsonreuters.com))