adidas announced today that it has entered into a definitive agreement to sell Reebok to Authentic Brands Group (ABG) for a total consideration of up to 2.1 billion euros ($2.5 billion), with the majority to be paid in cash at closing of the transaction and the remainder comprised of deferred and contingent consideration.
The closing of the transaction is subject to customary closing conditions and is expected to occur in the first quarter of 2022. adidas intends to share the majority of the cash proceeds to be received upon closing with its shareholders.
ABG has a portfolio of more than 30 brands and a history of buying up struggling brands such as Juicy Couture, Forever 21, and Brooks Brothers.
Adidas bought Reebok for $3.8 billion in 2006.
“With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success. As for adidas, we will continue to focus our efforts on executing our “Own the Game” strategy that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our stakeholders,” said Kasper Rorsted, CEO of adidas AG.
Jamie Salter, Founder, Chairman and CEO of ABG commented, “It’s an honor to be entrusted with carrying Reebok’s legacy forward. This is an important milestone for ABG, and we are committed to preserving Reebok’s integrity, innovation, and values – including its presence in bricks and mortar. We look forward to working closely with the Reebok team to build on the brand’s success.”
According to adidas group in a published statement, the sale of Reebok has no impact on adidas’ financial outlook for the current year or the company’s 2025 financial ambition that was announced as part of its Own the Game strategy in March of 2021.
In March of this year, adidas presented its 2025 “Own the Game” Strategy designed to significantly increase sales and profitability and gain market share by 2025. During the strategy formulation process, adidas assessed strategic alternatives for Reebok with a focus on ensuring both adidas and Reebok would be well positioned for sustainable growth.
Following this evaluation, adidas decided to focus its efforts on further strengthening the leading position of the adidas brand in the global sporting goods market and announced the initiation of a formal process to divest Reebok in February 2021.
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