Two major American outdoor companies are joining forces.
Bass Pro Shops announced on Monday that it has reached an agreement to acquire rival Cabela's in a cash deal worth $5.5 billion.
"A driving force behind this agreement is the highly complementary business philosophies, product offerings, expertise and geographic footprints of the two businesses," the companies said in a statement.
Both sell fishing and hunting equipment. Bass Pro Shops are mainly found in the eastern part of the U.S. and Canada, according to the company, while Cabela's has a stronger presence in the western part of North America.
Springfield, Mo.-based Bass Pro Shops will pay $65.50 per share in cash, a 19.2 percent premium over Friday's closing share price for Cabela's, which is headquartered in Sidney, Neb. The deal is expected to close in the first half of 2017, according to the companies.
USA Today writes that "it was not immediately clear whether the acquisition would result in any store closures" and notes that Cabela's sales have sagged:
"Long known for large-format destination stores, Cabela's has lost ground to smaller, nimbler competitors and online retailers. Sales at stores open at least a year fell 1.3% in the first half of 2016, compared to a year earlier, according to a securities filing.
"The number of purchases at Cabela's stores fell 8.1% during that period, reflecting a drop-off in foot traffic as customers bought less clothing and footwear from the retailer, although hunting sales increased and average revenue per transaction rose 8.2%."
Bass Pro Shops operates 99 stores and has some 20,000 employees while Cabela's has more than 19,000 "outfitters" at 85 stores, the statement says. Bass Pro Shops says it intends to keep Cabela's operations in Sidney and Lincoln, Neb.
Johnny Morris, Bass Pro Shops' founder and CEO, will remain at the helm of the combined company and said he hopes the deal will promote conservation:
"Conservation is at the heart and soul of Bass Pro Shops. Bass Pro Shops and Cabela's share a steadfast belief that the future of our industry, and the outdoor sports we all love, depends — more than anything else — on how we manage our natural resources. ... By combining our efforts, we can have a profound positive impact on the conservation challenges of our day and help foster the next generation of outdoor enthusiasts."