Adidas to Sell Reebok to Authentic Brands for Up to $2.5 Billion -- Update
13 August 2021 - 02:50AM
Dow Jones News
By Joshua Kirby
Adidas AG is to sell Reebok to Authentic Brands Group for up to
2.1 billion euros ($2.47 billion) and distribute the majority of
the cash proceeds to shareholders, the German sporting-goods
company said Thursday.
The sale to the New York-based brand-management company puts an
end to months of speculation over potential buyers for the brand.
The deal is expected to go ahead in the first quarter of next year,
Adidas said. The majority of the transaction will be paid in cash
up front, with the remainder made up of deferred and contingent
fees.
Adidas said earlier this year that it would sell Reebok, which
it bought in 2006 for around $3.8 billion. Despite significant
investment from the parent company, Reebok has struggled to gain
market share. Adidas and U.S. rival Nike have locked up many
lucrative sports sponsorships and deals with key athletes, making
it difficult for smaller brands to compete, Vontobel analyst Ramiz
Chelat told The Wall Street Journal earlier this week.
Following the sale, Adidas will focus on gaining market share in
the "attractive" sporting-goods industry, Chief Executive Kasper
Rorsted said. "With this change in ownership, we believe the Reebok
brand will be well-positioned for long-term success," he added.
The sale, which is subject to customary conditions, has no
impact on existing guidance for the full year, Adidas said. Reebok
has been counted as discontinued operations for interim trading
updates since Adidas made public its decision to sell in
February.
ABG will maintain Reebok's presence in brick-and-mortar stores,
ABG founder and CEO Jamie Salter said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
August 12, 2021 12:36 ET (16:36 GMT)
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