German sportswear company Adidas sells Reebok to ABG for €2.1 bn

The majority of the amount will be paid in cash at closing of the transaction and remainder will comprise deferred and contingent consideration. Adidas intends to share the majority of the cash proceeds to be received upon closing with its shareholders, the company said in a statement on Thursday.

Adidas bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey and Greg Norman brands, which Adidas later divested for a total consideration of €0.4 billion. In 2016 Reebok initiated a turnaround plan called ‘Muscle Up’ through which the brand was able to significantly improve its growth and profitability prospects.

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.

“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. With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success,” said Kasper Rorsted, CEO of Adidas AG.

“It’s an honour 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,” said Jamie Salter, founder, chairman and CEO of ABG.

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, the release said.

J P Morgan acted as exclusive financial advisor to Adidas AG and Hengeler Mueller served as legal counsel.

BofA Securities and Goldman Sachs & Co LLC served as financial, strategic and M&A advisors, while also providing committed financing, and KPMG International Limited served as accounting and due diligence advisor for ABG. Latham & Watkins, LLP acted as legal counsel for ABG. Private equity partners BlackRock LTPC, General Atlantic and Leonard Green & Partners, L P also played an instrumental role in this partnership.

Fibre2Fashion News Desk (KD)