On Thursday, Adidas said it had agreed to sell struggling sportswear brand Reebok for more than 2.2 billion euros, or approximately $2.5 billion, to Authentic Brands Group.
After the deal, Reebok will join a retail conglomerate that has helped many bankrupt brands such as Forever 21, Brooks Brothers, and Aeropostale in sales. This summer, Authentic Brands plans to prepare for an initial public offering.
In a news release, Adidas stated that Reebok’s acquisition might close in the first quarter of 2022. Adidas said that most of the acquisition price would be paid in cash once the deal closes. The remainder contains contingent or deferred consideration, but they have not disclosed the terms of that arrangement yet. Adidas said it would share the majority of the deal’s profits at the time of closing with its shareholders.
Adidas, a German sportswear company, has been searching for ways to sell Reebok or at least spin it off. It purchased Reebok, the Boston-based company, for $3.8 billion in 2006 as a way to increase its business and beat its rival sneaker giant Nike. Reebok continued to develop along with Adidas as its own core business grew, indicating pressure from investors to dump the brand.
It previously deprived some of Reebok’s lines, such as Greg Norman, Rockport, and CCM Hockey.
In a news release, the CEO of Authentic Brands Jamie Salter said that the retail conglomerate would help Reebok strengthen its business and keep its stores.
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