Berlin-Adidas sells Reebok to the Authentic Brands Group (ABG) for up to € 2.1 billion ($ 2.5 billion). This is because German sporting goods companies are focusing on their core brands after the deal is closed.
Adidas acquired Reebok for $ 3.8 billion in 2006 to help compete with rival Nike, but its sluggish performance repeatedly urged investors to sell brands focused on the United States and Canada. Was done.
Meanwhile, adidas, backed by partnerships with celebrities such as Kanye West, Beyonce and Pharrell Williams, was able to undermine Nike’s US advantage with its own brand.
Reebok is headquartered in Boston and will continue to operate in North America and Latin America, Asia Pacific, Europe and Russia, a US brand management company said in a statement, adding that it will work closely with Adidas during the transition.
For over 11 years, ABG has sold over 30 labels in approximately 6,000 stores. Its brands include apparel chains Aéropostale and Forever 21, and Sports Illustrated magazine.
Jamie Salter, Founder, Chairman and CEO of ABG, said:
“We are committed to maintaining Reebok’s integrity, innovation and values, including its presence in bricks and mortar,” he added.
Last month, ABG also filed for an initial public offering in the United States after a year of strong earnings growth.
After Kasper Rørst became CEO of adidas in 2016, Reebok launched a turnaround plan to help regain profitability, but its performance continues to lag behind the core adidas brand. , COVID-19 I was hit by a pandemic.
Adidas jumped from € 600 million ($ 704 million) in the first half of the previous year to € 823 million ($ 966 million) in the first half of Reebok last week, and the brand is € 68 million compared to net value. He reported making a net profit of ($ 80 million). Loss of € 69 million ($ 81 million) in the first half of 2020.
According to analysts, recent collaborations between Reebok and celebrities like Cardi B and a new focus on women’s apparel have put Reebok in a better place.
Adidas has already sold the Rockport, CCM Hockey and Greg Norman brands for € 400 million ($ 470 million), which was part of Reebok’s first purchase.
The German company said in a statement that the sale did not affect the financial outlook for the year or the goals set in the five-year strategy announced in March.
Adidas said that most of the € 2.1 billion ($ 2.5 billion) will be paid in cash at the end of the transaction scheduled for the first quarter of 2022, with the rest consisting of postponed conditional consideration. Stated.
He said he would share most of his cash income with shareholders.