Adidas to Sell Reebok to Authentic Brands Group for $2.5B
Adidas said last week that it entered into an agreement to sell Reebok to Authentic Brands Group (ABG) in a mostly cash deal worth €2.1 billion, or about $2.5 billion at current exchange. The deal is set to close in Q1 of 2022. ABG, a brand management company, owns more than 30 consumer brands, as well as the likeness rights and/or estates to celebrities such as Muhammad Ali, Elvis Presley, Shaquille O'Neal, and Marilyn Monroe.
In a company press release, ABG said Reebok is a premier destination for athletic and casual offerings, and it's goal is to maintain the brand’s global footprint across retail, wholesale and e-commerce channels. In addition, ABG plans to connect Reebok with "best-in-class licensees and a network of partners that seek to optimize value in the marketplace." Reebok's world headquarters will remain in Boston and ABG will work closely with adidas, Reebok’s president Matt O’Toole, and the Reebok team to transition the brand to ABG’s platform. Reebok’s operations will continue in the U.S. and Canada, Latin America, Asia Pacific, and Europe.
Total Retail's Take: The purchase of Reebok by ABG is a win-win for all parties involved. The brand has been owned by Adidas since 2006, when the German sportswear maker purchased it for $3.8 billion. However, after years of revenue decline and an attempt launch a turnaround plan, Adidas announced it would sell the business in December 2020. The addition of Reebok could be an asset to ABG in that while Reebok may have seen better years, it's still doing well given the current consumer environment that benefits performance and lifestyle footwear and apparel brands. Indeed, its U.S. sales were up 76 percent in the first six months of 2021 vs. 36 percent for the industry. Lastly, experts have said that Reebok merchandise can be used to fill the empty space in wholesale stores, which has largely been caused by footwear brands pulling out of retailers to focus on direct-to-consumer sales.