Adidas inks $2.5 bn deal to sell Reebok to Authentic Brands Group 'for long-term success'

Sports goods manufacturing giant idas on Thursday announced that it has entered into a definitive agreement to sell Reebok to Auntic Brands Group (ABG) for a total consideration of up to € 2.1 billion which is almost 2.5 Billion USD, with majority to be paid in cash at closing of transaction and remainder comprised of deferred and contingent consideration.

As per idas' official release, " closing of transaction is subject to customary closing conditions and is expected to occur in first quarter of 2022. idas intends to share majority of cash proceeds to be received upon closing with its shareholders."

idas AG CEO Kasper Rorsted on selling Reebok

Kasper Rorsted, CEO of idas AG on expressed that selling Reebok will make branch 'well-positioned for long-term success'. 

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

ABG on Reebok's deal

Jamie Salter, Founder, Chairman, and CEO of ABG said, “It’s an honour to be entrusted with carrying Reebok’s legacy forward. 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 Reebok team to build on brand’s success.”

idas and Reebok

idas bought Reebok in 2006. At time, acquisition included Rockport, CCM Hockey, and Greg Norman brands, which idas later divested for a total consideration of € 0.4 billion. In 2016 Reebok initiated a turnaround plan called 'Muscle Up' through which brand was able to significantly improve its growth and profitability prospects.

In March 2021, idas presented its 2025 'Own Game' Strategy designed to significantly increase sales and profitability and gain market share by 2025. During strategy formulation process, idas assessed strategic alternatives for Reebok with a focus on ensuring both idas and Reebok would be well-positioned for sustainable growth. Following this evaluation, idas decided to focus its efforts on furr strengning leing position of idas brand in global sporting goods market and announced initiation of a formal process to divest Reebok in February 2021.

As per official release, sale of Reebok has no impact on idas’ financial outlook for current year or company’s 2025 financial ambition that was announced as part of its Own Game strategy in March of 2021.  

JP Morgan acted as exclusive financial visor to idas AG and Hengeler Mueller served as legal counsel.

BofA Securities and Goldman Sachs & Co. LLC served as financial, strategic, and M&A visors, while also providing committed financing, and KPMG International Limited served as accounting and due diligence visor for ABG. Latham & Watkins, LLP acted as legal counsel for ABG. Private equity partners BlackRock LTPC, General Atlantic and Leonard Green & Partners, L.P. also played an instrumental role in this partnership.

(Image Credits: Pixabay/Shutterstock/Representative Image)