Adidas to buy Reebok, expand into Nike turf
3 August 2005, FRANKFURT - German sports good group Adidas-Salomon laid down a challenge to U.S. giant Nike by announcing Wednesday that it is to pay EUR 3.1 billion to buy American rival Reebok.
3 August 2005
FRANKFURT - German sports good group Adidas-Salomon laid down a challenge to U.S. giant Nike by announcing Wednesday that it is to pay EUR 3.1 billion to buy American rival Reebok.
The move by Adidas, which is one of the sponsors for next year's World Cup football championships in Germany, will help the group to bolster its presence in the key U.S. market.
The company hopes to complete the Reebok deal in the first half of next year.
Reebok chairman Paul Fireman, who holds 17 per cent of the sports-shoe maker along with his wife Phyllis, has already signalled he would sell his shares.
"Adidas is the perfect partner for Reebok. The transaction provides our shareholders with good value for their shares and our employees with an opportunity for an even more exciting future," Fireman said.
Adidas said, "The complementary nature of the two businesses in various geographical regions, products and customer segments provides a significant opportunity for increased value creation."
The combination would give rise to "substantial cost savings as well as incremental revenue and profits from more complete coverage of all consumer segments", Adidas said.
The announcement also coincided with the release of Adidas' latest results, with Europe's biggest sports good group posting a 52 per cent jump in second-quarter earnings to EUR 67 million.
Adidas said sales rose by 8.2 per cent to EUR 1.52 billion, boosted by growth in markets around the world except in Europe.
Subject: German news