Adidas is offering Reebok to Authentic Brands Group for 2.1 billion euros ($2.5 billion) as the German sporting goods company focuses on its core brand after a deal that didn’t deliver.
Adidas purchased Reebok for $3.8 billion in 2006 to help compete against rival Nike, yet its languid execution incited rehashed calls from investors to sell the U.S. and Canada-focused brand.
Meanwhile, Adidas figured out how to cut into Nike’s predominance in the US with its own image, helped by cooperation with famous people like Kanye West, Beyonce, and Pharrell Williams.
Reebok will keep its central command in Boston and proceed with operations in North and Latin America, Asia-Pacific, Europe, and Russia, the U.S. brand the management firm said in a statement will cooperate with Adidas during the transition.
For more than 11 years, ABG has amassed in excess of 30 labels sold in nearly 6,000 stores. Its brands include apparels chains Aéropostale and Forever21, and Sports Illustrated magazine.
“We’ve had our sights set on Reebok for a long time, and we’re eager to at last carry this classical brand into the overlay,” Jamie Salter, Founder, Chairman, and Chief Executive of ABG, said.
“We are focused on saving Reebok’s uprightness, innovation, and qualities – remembering its essence for blocks and mortar,” he added.
Last month, ABG additionally petitioned for a U.S. IPO following a year of solid income development.
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After Kasper Rorsted took over as Adidas Chief Executive in 2016, he set up a turnaround plan which helped Reebok get back to productivity, yet its presentation kept on slacking that of the core Adidas brand and it was then hit by the Coronavirus pandemic.
Adidas detailed last week that Reebok’s first-half deals leaped to 823 million euros from 600 million a year ago, and the brand made a net addition of 68 million euros compared with an overall deficit of 69 million in the first half of 2020.
Reebok’s new joint efforts with VIPs like Cardi B and a restored focus around ladies’ clothing have placed it in a superior spot, analysts say.
Adidas has effectively sold the Rockport, CCM Hockey, and Greg Norman brands for 400 million euros, which were essential for the first Reebok buy.
The German company said in an explanation that the deal has not affected its financial outlook for the current year or for its objectives set out in the five-year projection it declared in March.
Adidas said most of the 2.1 billion euros would be paid in real money at the end of the transaction, expected to end in the first quarter of 2022, with the remainder involved in a deferred and contingent transaction.
It said it would share most of the cash proceeds with its investors.
