Reebok has been struggling for the past few years, and Adidas is ready to part with the sneaker brand after agreeing to sell it to Authentic Brands Group.
Adidas To Sell Reebok To Authentic Brands Group
German apparel giant Adidas has announced today that it has agreed to sell Reebok to Authentic Brands Group. The Reebok deal is set to be worth around 2.1 billion euros, or roughly $2.5 billion and would take away Reebok from Adidas‘s control for the first time in years.
Authentic Brands Group is a New York-based brand management company that is known for its holdings in many ventures such as apparel, athletics, and entertainment. Over the years, Authentic Brands Group has built a reputation for acquiring bankrupt brands such as Brooks Brothers, Aeropostale and Forever 21 and adding them to its retail conglomerate.
At the moment, Authentic Brands Group is not yet a publicly listed company, but it is preparing for an IPO. Reebok has been a part of Adidas since the German company bought it for $3.8 billion in 2006 in a bid to compete with Nike. However, Reebok has underperformed in recent years, prompting repeated calls from investors to sell the brand.
Adidas has been able to successfully enter the United States market without the help of Reebok, thanks to numerous partnerships with celebrities such as Kanye West, Beyonce and Pharrell Williams.
Reebok To Maintain Its Operational Status
According to Reebok, it will maintain its headquarters in Boston. The company will also continue operations in North and Latin America, Asia-Pacific, Europe and Russia. Furthermore, Reebok will work closely with Adidas during the transition period to ensure everything goes as expected.
Jamie Salter, founder, chairman and CEO of Authentic Brands Group, stated that they have been eyeing Reenok for the past few years and they are excited to acquire it. “We are committed to preserving Reebok’s integrity, innovation, and values – including its presence in bricks and mortar” the CEO added.
The shares of Adidas went up by 0.57% on the German stock exchange. ADS has performed well this year, rising from EUR 296 to currently trade at EUR 308.