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Adidas sells Reebok to Authentic Brands Group for €2.1 billion

Adidas sells Reebok to Authentic Brands Group for €2.1 billion
Adidas sells Reebok to Authentic Brands Group for €2.1 billion

German sportswear company Adidas AG has reportedly sold Reebok International Limited to Authentic Brands Group (ABG), a U.S. brand management company, for close to €2.1 billion as it focuses on its core products after investors applied some pressure.

Reebok was bought in 2006 for €3.1 billion, in an epic deal developed to help the clothing and trainers firm take on competitor Nike. However, the brand never restored to its glory of the 80s, and investors of Adidas demanded some action.

Reebok, which was founded in Bolton in 1958 and is currently based in the United States in Boston, will now be a part of the ABG conglomerate. ABG bought close to 30 labels, including Forever 21, Aéropostale, and also owns the magazine Sports Illustrated.

The Chairman, Founder, and Chief Executive of the group, Jamie Salter, supposedly said that it is a crucial milestone for the conglomerate, and that it is dedicated to preserving the innovation, values, and integrity of Reebok, including its presence in the physical stores.

ABG recently filed for an IPO in the United States and has bought many brands in the process of bankruptcy, which includes Brooks Brothers and Barneys New York.

Adidas apparently stated that most of the price of the acquisition will be paid in cash when the deal is finalized early next year, adding that it will share most of the proceeds with its shareholders.

Since February, Reebok has been officially on the block for sale, after over ten years of efforts by Adidas to bring the brand back to life.

Neil Saunders, the Managing Director of GlobalData, apparently stated that while the German sportswear company did attempt to restore Reebok’s profitability, it was less successful in building a brand that was capable of stealing share and capturing the attention of consumers. Lack of clarity around Reebok’s image was the primary issue, he added, due to which the brand failed to make its mark with both athleisure and professional sporting customers.

Source credits:

https://www.theguardian.com/business/2021/aug/12/adidas-sells-reebok-to-us-conglomerate-after-shareholder-pressure

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.