Adidas sells Reebok to Authentic Brands for $2.5 billion.
Sixteen years after buying Reebok for $ 4 billion, German sportswear giant Adidas is selling it for just over half to Authentic Brands Group, the voracious buyer of struggling brands.
In recent years, Authentic has acquired Brooks Brothers and Forever 21, adding to a team that includes Sports Illustrated. The acquisition of Reebok for 2.1 billion euros, or $ 2.5 billion, comes as Authentic prepares to go public.
“We’ve been targeting Reebok for many years,” Authentic chief executive Jamie Salter said in a statement. “Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also enjoys wide distribution worldwide. “
Reebok operates in 80 countries, with approximately 70 percent of its business outside of the United States and Canada. Its world headquarters will remain in Boston.
When Adidas acquired Reebok in 2005, he hoped that Reebok could regain the glory of its 1980s heyday and create a formidable rival for Nike. But the brand got lost in the larger Adidas empire and struggled to connect with consumers. Reebok sales fell 19% in 2020 to € 1.41 billion, from € 1.75 billion the year before.
“For a period of time, the brand was probably stronger than the products,” Kasper Rorsted, CEO of Adidas, said of Reebok in 2016. “At the moment, I would say our products are stronger than the brand, and we need to make sure that we reconnect our consumers with the brand that we have.
Adidas is no stranger to the sale of troubled businesses, deals that have had varying degrees of success. Its sale of the TaylorMade brand of golf equipment was a winner for the acquirer, private equity firm KPS Partners, bolstered in part by its deal with Tiger Woods. (KPS has since sold the brand.) But shoe brand Rockport, which Adidas sold to Berkshire Partners, filed for bankruptcy, accusing its former parent company of a sales process that “took a lot longer and was significantly more expensive than expected “.
Shaquille O’Neal, whose shoe line with Reebok was launched in 1992 and who sold a stake in his own brand to Authentic Brands in 2015, celebrated the sale. “It is a dream come true to welcome this legendary brand into the family,” he said in the Authentic statement.
Last year, Mr. O’Neal told CNBC he intended to own Reebok, arguing that Adidas had “diluted” it so much “to the point where it’s almost gone.”
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