German sports equipment manufacturer Adidas announced on Thursday that it had reached a deal to sell its problem subsidiary for 2.1 billion euros Reebok to American society
Authentic Brands Group.
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, the German group said in a statement. “It is an honor to be entrusted with the continuation of the legacy of Reebok,” commented Jamie Salter, founder and president of ABG, which manages the fashion brands JCPenney, Forever21 and Brooks Brothers in particular.
Focus on strengthening the Adidas brand
This sale is not a surprise. At the beginning of August, the group had indicated that it was in the process of finalizing the sale of its subsidiary, which had already left the scope of activity since the start of 2021. “We have always appreciated Reebok and are grateful for the contributions of the brand and its teams. to our company ”, affirmed Kasper Rorsted, president of Adidas quoted in a press release. The group now intends to focus on strengthening the Adidas brand, he recalled.
Adidas’ problem child
Adidas had acquired Reebok for 3.1 billion euros in 2006 with the aim of getting closer to its great American rival Nike.
Since its takeover by the German group, Reebok, specializing in women’s sportswear, has always been considered a problem child within the equipment manufacturer, regularly fueling rumors about a possible sale.
The brand was only worth 803 million euros on the group’s balance sheet after several accounting depreciations at the end of 2020.
Reebok’s revenue grew another 2% in 2019, to € 1.75 billion, a small portion of the € 23.6 billion for the entire Adidas group.
A sale without impact on Adidas’ financial forecasts
The sale of Reebok will have no impact on Adidas’ financial forecasts for the current year, the German group also said.
In early August, the equipment manufacturer had raised its annual forecasts despite supply difficulties, especially in Vietnam and a good second quarter.
From April to June, net profit group share 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 Herzogenaurach (south) group is now targeting 20% annual sales growth and net profit between 1.4 and 1.5 billion euros.