Adidas to Sell Reebok to Authentic Brands for Up to $2.5 Billion -- Update

   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 [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

August 12, 2021 12:36 ET (16:36 GMT)

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