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ABG Acquires Reebok From Adidas

Authentic Brands Group continues its aggressive acquisition strategy, announcing an agreement to buy the shoe brand Reebok from adidas.

Adidas said Thursday it signed a deal to sell the sneaker and sportswear brand to Authentic Brands Group for up to 2.1 billion euros, or roughly $2.5 billion.

Reebok had been struggling in recent years, and this acquisition will make it part of  a retail conglomerate that has snapped up many bankrupt brands such as Brooks Brothers, Aeropostale, Forever 21 and Eddie Bauer, among others. ABG’s strategy has been to pick up brands that have lasting value, but at bargain basement prices when those companies are struggling.

ABG then works with its partners to rebuild the acquired company both in North America and globally. Last week, for example, TLL reported on ABG’s plan to expand the Forever 21 in China through a key licensing agreement.

The company’s strategy has resulted in rapid growth, and Authentic Brands is now preparing for an initial public offering that could come as soon as this summer.

“We’ve had our sights set on Reebok for many years, and we’re excited to finally bring this iconic brand into the fold,” said Jamie Salter, Founder, Chairman and CEO of ABG.  “Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also has expansive global distribution. adidas has been an incredible steward of the Reebok brand, and we look forward to working with the Reebok team to continue their great work and further its position as one of the world’s leading consumer brands.”

Reebok is also an innovator in the world of athletic shoes, having created the first spiked running shoe, the first athletic shoe designed specifically for women, and its breakthrough THE PUMP™ technology.

Adidas, one of the world’s largest athletic shoe brands, bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey and Greg Norman brands, which adidas later divested.

In 2016, adidas says, Reebok initiated a turnaround plan called Muscle Up through which the brand was able to significantly improve its growth and profitability prospects.

In March of this year, adidas presented its 2025 Own the Game Strategy designed to significantly increase sales and profitability and gain market share by 2025. During the strategy formulation process, adidas assessed strategic alternatives for Reebok with a focus on ensuring both adidas and Reebok would be well positioned for sustainable growth.

Following this evaluation, adidas decided to focus its efforts on further strengthening the leading position of the adidas brand in the global sporting goods market and announced the initiation of a formal process to divest Reebok in February 2021.

“Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our company,” said Kasper Rorsted, CEO of adidas AG. “With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success. As for adidas, we will continue to focus our efforts on executing our “Own the Game” strategy that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our stakeholders,”

Reebok currently operates in 80 countries, with approximately 70% of its business hailing from outside of the U.S. and Canada. Reebok continues to be a premier destination for athletic and casual offerings, and Salter says it is ABG’s goal to maintain the brand’s global footprint across retail, wholesale and e-commerce channels.

“It’s an honor to be entrusted with carrying Reebok’s legacy forward,” Salter added. “This is an important milestone for ABG, and we are committed to preserving Reebok’s integrity, innovation, and values, including its presence in bricks and mortar. We look forward to working closely with the Reebok team to build on the brand’s success.”

ABG’s interest in Reebok is also exemplified by the fact basketball legend Shaquille O’Neal, who has partnered with Reebok over the years, is a part owner of ABG.

“As a longtime partner of Reebok and an owner of ABG, it’s a dream come true to welcome this legendary brand to the family,” Shaquille O’Neal said.

ABG says that with Reebok, ABG plans to employ its core playbook, connecting strong brands with best-in-class licensees and a network of partners that seek to optimize value in the marketplace. The brand’s world headquarters will remain in Boston and ABG will work closely with adidas, Reebok’s President Matt O’Toole and the entire Reebok team to transition the brand to ABG’s platform. Reebok’s operations will continue in the U.S. and Canada, Latin America, Asia Pacific, Europe and Russia.

The transaction, which is expected to close in the first quarter of 2022, is subject to customary closing conditions, including regulatory approval.

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