The German sports equipment manufacturer Adidas announced on Thursday August 12 that it had reached an agreement to sell its problem subsidiary Reebok to the American company Authentic Brands Group (ABG) for 2.1 billion euros.
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The sum will be paid largely in cash and the transaction should be completed in the first quarter of 2022, after the approval of the competent authorities, said the German group in a press release. In early August, the group indicated that it was finalizing the sale of its subsidiary, which had already left the scope of activity since the start of 2021.
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“We have always appreciated Reebok and are grateful for the contributions of the brand and its teams to our business”, said Kasper Rorsted, president of Adidas quoted in a press release. The group now intends to focus on strengthening the Adidas brand, he recalled.
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“It is an honor to be entrusted with the continuation of Reebok’s legacy”for his part commented Jamie Salter, founder and president of ABG, which notably manages the fashion brands JCPenney, Forever21 or Brooks Brothers.
Adidas had acquired Reebok for 3.1 billion euros in 2006 in order to get closer to its great American rival Nike. Since its takeover by the German group, Reebok, which specializes in women’s sportswear, has always been considered a problem child within the equipment manufacturer, regularly fueling rumors about a possible sale.
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The brand was only worth 803 million euros on the group’s balance sheet after several accounting impairments at the end of 2020. Reebok’s turnover had increased by another 2% in 2019, to 1.75 billion euros, a small part of the 23.6 billion euros of the entire Adidas group.
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The sale of Reebok will have no impact on Adidas’ financial forecasts for the current year, the German group also said. At the beginning of August, the equipment manufacturer had raised its annual forecasts despite supply difficulties, especially in Vietnam and a good second quarter.
From April to June, the group’s net profit stood at 397 million euros, against a loss of 295 million euros a year earlier, in the midst of the first wave of Covid-19. The group from Herzogenaurach (south) is now aiming for annual growth of 20% in sales and a net profit of between 1.4 and 1.5 billion euros.