Cervélo owner to buy Cannondale parent company Dorel Sports to become world's biggest bike manufacturer

Netherlands-based Pon Holdings, which owns brands including Cervélo, Focus, Gazelle and Urban Arrow, is to buy Canada’s Dorel Sports, owner of Cannondale, to create what it says will be the world’s biggest manufacturer of bicycles and e-bikes, with annual turnover of €2.5 billion.

Pon Holdings, which is headquartered in Amsterdam, says the €700 million deal, which is expected to close in before the end of the first quarter of 2022, will put its cycling division ahead of Taiwan-based Giant Bicycles in terms of annual turnover.

Janus Smalbraak, the company’s CEO, said: “Today’s step is a milestone in the creation of a world-leading bike company with a variety of quality brands.

“With the acquisition of Gazelle in 2012 we launched a strategy that step by step led us to the €1.5 billion in revenue bike group that we are today, with great comfort and performance bicycle brands, of which 70% are electric. As a result of this strategy, we have now reached a highlight with the acquisition of Dorel Sports.”

He continued: “Dorel Sports really is complementary to Pon Bike and that’s why this is such a logical step. Together we can further cater the ever growing demand for quality and electric bikes, whether it’s for urban use, leisure or sports.

“Cycling is not only healthy, it also plays a critical role in fighting inner-city congestion,” he added.

“It’s one of the most sustainable ways of transport. We are determined to make bikes a powerful part of mobility.”

Martin Schwartz, CEO of Dorel Industries, said of the decision to sell its sports division, which besides Cannondale includes Schwinn, GT and Mongoose:“We started a thorough review of strategic alternatives earlier this year.

“Our objective has consistently been to create value for our shareholders. The divestiture of Dorel Sports represents a unique opportunity to unlock value by capitalizing on strong demand for scaled assets in the bicycle segment.” Dorel Sports has been part of Dorel Industries since 2004.”

Besides strengthening Pon Holdings’ position in the North American market, the company also believes that its expanded portfolio of brands will be able to benefit from each other’s strength and experience, for instance through enhancing the e-bike offer of the acquired brands or harnessing their expertise in e-commerce for the European businesses.

A previous takeover attempt by Pon Holdings to create what would have been the world’s biggest business came to nothing in 2017 when an €845 million bid for fellow Dutch company Accell – owner of Diamondback, Lapierre and Raleigh, among others, was rejected by the target company’s shareholders