Adidas to sell Reebok to Authentic Brands for up to US$2.5b

[FRANKFURT] Adidas agreed to sell its underperforming Reebok business to Authentic Brands Group for up to US$2.5 billion, adding another well-known name to they buyer's growing lineup of apparel brands.

The majority of the share price will be paid in cash at closing, with the rest coming as deferred and contingent consideration, the companies said Thursday in a statement. The deal is expected to close in the first quarter of 2022.

The German sportswear giant formally began a divestiture of Reebok early this year after trying to revive the brand's performance for more than a decade. Authentic Brands, which filed recently for an initial public offering in the US, has already acquired more than 30 brands, including bankrupt assets such as Barneys New York. Its portfolio companies include Brooks Brothers, Forever 21 and Sports Illustrated.

Adidas shares rose as much as 2.5 per cent to 314.70 euros (S$501.29) in Frankfurt trading after the announcement.

Already this year, Authentic Brands has bought Eddie Bauer with Sparc Group, its joint venture with Simon Property Group. Authentic Brands also acquired a collection of brands from PVH Corp that include Izod and Van Heusen.

Adidas acquired Reebok for US$3.8 billion in 2006 and returned the division to profitability in 2018, eking out sales growth of 2 per cent in 2019.

BLOOMBERG