Business: Quiksilver, Billabong Seek Bigger Waves through Merger

-WSJ

The parent of the Quiksilver surfwear brand has agreed to acquire rival Billabong International Ltd. , combining two of the largest active sports brands as the industry is undergoing a major shakeout.

The combination would create a global player with ubiquitous brands, about $2 billion in annual sales and 630 stores in 28 countries. But both Quiksilver and Billabong have struggled in recent years with declining sales and corporate restructurings.

Boardriders Inc., formerly known as Quiksilver Inc., of Huntington Beach, Calif., is paying about 400 million Australian dollars (US$315 million) for its competitor, according to a person familiar with the situation.

The deal values Billabong at A$1 a share, or a slight premium to its closing price on Australia’s stock exchange on Wednesday, the day before the deal was announced.

Both companies expanded rapidly in the 1990s by selling board shorts, skateboarding T-shirts and, later, snow gear. But they have struggled as the once hot surf, skate and activewear industry has cooled, and they found themselves with too many stores in too many malls. They also lost customers as the athleisure trend exploded with varying types of sports apparel now found in most specialty and department stores.