Adidas pays over £2 billion to buy out Reebok and take on Nike |
|
|
Published
:
Wed, 03 Aug 2005 16:05
|
FRANKFURT: German sports goods maker Adidas-Salomon is buying U.S. rival Reebok for $3.8 billion share deal in a bid to take on No 1 Nike in the latter's home market. That equates to a little over £2 billion GBP and around €3 billion Euro.
Adidas, No 2 in the segment, said it is buying the outstanding shares of Reebok for $59 in cash, offering a 34 per cent premium on the closing price of the No 3 player on Tuesday. The deal will be funded through a mix of equity and debt and will be a friendly acquisition.
The acquisition will double Adidas' sales in North America, especially its basketball and sports lifestyle business. The deal, expected to close in 2006, requires the approval of Reebok's shareholders and the regulators.
The unified group had a combined 2004 sales of 9 billion euros, while Nike had crossed $13.7 billion in 2004-2005.
Adidas chief executive Herbert Hainer said in a statement that "Together, we will expand our geographic reach, particularly in North America, and create a footwear, hardware offering that addresses a broader spectrum of consumers and demographics."
Reebok will continue to be a different brand and the company's chairman and CEO Paul Fireman will be in charge of the brand.
Adidas had recorded 33 per cent increase in its second quarter income, which stood at 94 million euros. Its sales rose by 8.2 per cent to 1.52 billion euros.
Reebok was founded by Joseph William Foster to make making running shoes. Foster's two grandsons started a company in 1958 and called it Reebok.
|
|
|
|
|
|
Print this Story
