Adidas To Sell Reebok To Authentic Brands Group For $2.5 Billion

UNITED STATES — In October 2020, D.M. Fashion Book reported that German sportswear, sneaker and apparel giant adidas was considering selling Boston-based athletic footwear and apparel company Reebok (see it here).

adidas, which owns Reebok, publicly confirmed rumors that it was exploring options for the brand. Reports have been circulating for a while that the company was looking to sell the brand, which it acquired in 2006 for $3.8 billion. In 2019, it reportedly wrote the value of the brand down to just under $1 billion.

Jamie Salter‘s Authentic Brands Group just purchased Reebok from adidas for 2.1 billion euro (around $2.5 billion).

The cash transaction, expected to close in the first quarter, resets the active game on several fronts, freeing adidas to focus on its much bigger flagship business while giving licensing powerhouse ABG a big boost in the hot category, and just before its planned IPO this summer.

Over the past few years, Reebok have been struggling.

ABG has become a voracious acquirer scooping up rights to celebrity names from Marilyn Monroe to Shaquille O’Neal, brands such as Spyder and Airwalk and retailers Forever 21, Brooks Brothers and Barneys New York along with many others.

“We’ve had our sights set on Reebok for many years, and we’re excited to finally bring this iconic brand into the fold,” Salter said. “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 operates in 80 countries and gets about 70 percent of its business from outside the U.S. and Canada.

ABG said it “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.” Salter and crew plan to maintain the brand’s global footprint across retail, wholesale and e-commerce.

O’Neal said, “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.”

Reebok will also have some new, especially financially savvy types, on the team going forward. ABG said its private equity backers BlackRock, General Atlantic and Leonard Green & Partners “played an instrumental role in this partnership.”

Kasper Rorsted, Adidas’ CEO, said: “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. 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 has long been overshadowed by its parent company and has been a perennial underperformer even though results have improved recently. Reebok’s sales bounded 94 percent in the second quarter versus a year ago, and 13 percent above 2019 levels.

Photos Credit: Courtesy