“Korean company’s acquisition rumor is out of the question. There will be no response in the future.”
Callaway’s sales are strong, revenue increased 7% year-over-year
Callaway has officially stated that there were “no discussions” about the acquisition from a Korean company. This comes as a rare official denial in response to reports that a Korean Strategic Investor (SI) was participating in the acquisition of Callaway.
On the 20th, Callaway CEO Oliver G. Brewer III said, “We confirm that we are not aware of any such discussions.” This comes only a day after acquisition rumors surfaced in Korea.
CEO Brewer stated, “Although it is a long-standing practice not to comment on market rumors, we have decided to completely refute media reports that a Korean company is launching a takeover bid for our company,” adding, “We will no longer comment on this rumor in the future.”
He argues there is no need to sell the company as the golf equipment business is reviving due to strong sales. Last year, Callaway’s revenue increased by 7.2% compared to the previous year, recording $4.285 billion. Although net profit decreased by 40% from the previous year to $95 million, it was explained that external factors such as increased borrowing costs due to interest rate hikes were strongly applied.
CEO Brewer predicts that profitability will significantly increase this year as Callaway clubs and golf balls gain popularity in the U.S., where they have a strong fanbase. Callaway holds the number one market share in the U.S. for drivers, fairway woods, hybrids, and irons. The Chrome Tour golf ball lineup is ranked second in market share. The number of new Chrome Tour golf ball users this year is expected to reach 200,000.
Meanwhile, some Korean media have reported that major shareholders of Callaway such as BlackRock Advisors LLC (12.09%), Providence Equity Partners LLC (11.48%), and Thomas Dundon (10.11%) are planning to sell Callaway after spinning off Topgolf. It was also reported that a Korean company was included in the list of potential acquirers.
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