Adidas offloads Reebok brand for $2.5 billion
After announcing its decision to spin off or sell Reebok at the start of the year due to a sustained decline in revenue, adidas has struck a deal with Authentic Brands Group for $2.5 billion.
Adidas purchased the sneaker and sportswear brand in 2006 for $3.8 billion in an attempt to stay up to pace with its biggest competitor Nike, but Reebok has struggled behind other sports apparel competitors.
The terms of the arrangement have not been disclosed, however, adidas said in a statement the majority of the acquisition price will be paid in cash when the deal closes in the first quarter of 2022 and the remainder is comprised of deferred or contingent consideration.
“Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our company, CEO of adidas AG, Kasper Rorsted said.
“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.”
Adidas has previously divested some of Reebok’s lines, Rockport, CCM Hockey and Greg Norman.
Reebok will become part of a retail conglomerate that has snapped up many bankrupt brands such as Brooks Brothers, Aeropostale and Forever 21.
Authentic Brands CEO, Jamie Salter, said the retail conglomerate will work with Reebok to strengthen its business and maintain its brick-and-mortar stores.