When it comes to exciting shoe brands, Skechers is probably one of the last companies that comes to mind. With their comfort-first, fashion-last approach, they’ve long been seen as the go-to brand for practicality and affordability over style.
One private equity firm, however, finds Skechers to be seriously exciting, so much so they’re paying a 30% premium to acquire the U.S. shoe company. 3G Capital announced their acquisition of Skechers earlier this month, with the Brazilian firm paying $9.4 billion to take the company private. The deal marks one of the most high-profile transactions in the M&A space this year, standing out not only for its scale but also for its boldness amid a volatile and uncertain market environment. In this blog, we’ll explore who 3G Capital are, why Skechers stands out as an acquisition target, and how market volatility could turn this deal from a bargain into a blunder.
3G Capital: The Dealmakers Behind the Curtain.
Before diving into this latest deal, it’s worth understanding who 3G Capital actually are. Unlike major private equity giants like Blackstone or KKR, 3G flies under the radar, known primarily to those who closely follow the finance world.
3G Capital is a Brazilian-American investment firm founded in 2004, with offices in New York and Rio de Janeiro. The group has built a reputation for engaging in unconventional, high-stakes deals involving household-name companies, all while bringing a distinct and disciplined approach to private equity.
At the heart of 3G Capital’s operations is an owner-operator model. Unlike traditional private equity firms, 3G keeps companies founder-led but uses both their financing and ‘buy-and-build’ expertise to maximise efficiency and output. The company will often place their own executives into the companies they acquire, taking a more ‘hands-on’ approach than most private equity firms.
Their goal is to generate long-term value through operational discipline. A key part of this is zero-based budgeting, a system where no cost is taken for granted and every dollar spent must be re-justified each year. So if the cost can’t be explained, it’s cut!
Combining this with lean staffing, synergy realisation, and a culture revolving around frugality, 3G pushes their businesses to extract maximum performance.
This approach draws mixed reviews. Shareholders love it, as boosted profit often leads to stronger share prices or dividend payouts. Critics, however, argue that the relentless focus on cost-cutting can stifle innovation and undercut long-term growth, leaving companies stalling once initial efficiency gains run dry.
3G Capital has had a plethora of high-profile deals over the years that demonstrate this strategy in action. In 2010, they acquired Burger King for $3.3 billion, implemented their restructuring and efficiency techniques, and took the company public again two years later. Eventually they merged Burger King with the Canadian fast food chain Tim Hortons to create Restaurant Brands International, now a $32 billion fast food giant.
One of 3G’s boldest plays materialised when they teamed up with Warren Buffet and Berkshire Hathaway to acquire Heinz and then eventually merge the company with Kraft Foods to create the single food giant, Kraft Heinz. Valued at $49 billion, the deal was one of the largest in the consumer goods space, resulting initially in soaring profits for the new consolidated company. However, recently the company has struggled with slowing growth, brand underinvestment, and declining market share.
Why Skechers? Unpacking 3G’s Sneaker Bet
Skechers is the latest household name 3G Capital has added to its portfolio and while it may lack the kerb appeal of trendier shoe brands, there are plenty of reasons it could catch investors’ attention. Founded in 1992, Skechers has grown into one of the largest footwear companies in the world, selling in roughly 180 countries. This global footprint helps generate nearly $9 billion in annual revenue and close to $1 billion in EBITDA.
While Skechers’ global presence and ability to generate revenue are attractive, it’s the company’s recent share price history that causes them to stand out as an acquisition target. Up to as recently as January 2025, Skechers traded at $78 per share, however, Skechers predominantly manufactures their products in Vietnam and China, so their share price has plummeted as low as $45 after tariffs from the Trump administration were announced and put into place.
With this depressed share price, 3G Capital has been able to swoop in with a $63 per share acquisition, taking advantage of current market conditions. However, whether this proves to be a savvy bargain or a value trap will depend entirely on what comes next.
The Skechers Play: Bold, Brilliant… or a Blunder?
So, how good is this deal really? With a $9.4 billion price tag, 3G Capital’s acquisition of Skechers comes at a 30% premium. At face value, that may seem like a hefty sum, but over the past year, Skechers’ share price has hovered around $70, only falling after tariffs were introduced. This is where the line between opportunity and disaster emerges for 3G Capital.
By making this bet, 3G is hoping that tariffs and global trade tensions eventually blow over, allowing the stock to recover. If that happens, they’ve essentially picked up a $70-per-share company for $63. Bargain.
However, that ‘if’ is a big one. The current U.S. administration has shown no signs of backing down on its trade stance. And for a company like Skechers, that’s deeply exposed to Asian manufacturing, tariffs remain a serious and ongoing risk. If tensions escalate further, the stock could slide to new lows, and what looked like a value play could quickly turn into a costly mistake.
What this deal does highlight, however, is how moments of market uncertainty can create rare windows for bold M&A plays. While most firms are sitting on the sidelines amid global instability, 3G Capital may have spotted a discount, if their bet on easing trade tensions and market recovery plays out.
3G Capital’s $9.4 billion acquisition of Skechers is bold by any measure. Paying a premium for a tariff-sensitive company while most firms play defence highlights just how confident, or contrarian, 3G is feeling.
If trade tensions ease and margins hold, this could be remembered as a textbook example of opportunistic buying. If not, it risks becoming a cautionary tale. 3G has proven its willingness to make aggressive bets before, some wildly successful, others less so. This deal falls firmly in that tradition.
This deal gives us an interesting insight into market sentiment. If the smart money at 3G Capital is willing to make this multibillion-dollar bet on a market rebound, maybe everything isn’t as bad as it seems.
In that case, is this a masterclass in buying low? Or the beginning of a very expensive lesson?
