by Stephen Garner

Authentic Brands Group (ABG) announced on Thursday that it has reached a definitive agreement to purchase Reebok from Adidas for a total consideration of up to €2.1 billion (approximately $2.5 billion), with the majority to be paid in cash at closing of the transaction and the remainder comprised of deferred and contingent consideration. The transaction, which is expected to close in the first quarter of 2022, is subject to customary closing conditions, including regulatory approval.

“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,” said Kasper Rorsted, CEO of Adidas AG. “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.”

Adidas bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey, and Greg Norman brands, which Adidas later divested for a total consideration of € 0.4 billion. In 2016 Reebok initiated a turnaround plan called “Muscle Up” through which the brand was able to significantly improve its growth and profitability prospects.

In March of this year, Adidas presented its 2025 “Own the Game” Strategy designed to significantly increase sales and profitability and gain market share by 2025. During the strategy formulation process, Adidas assessed strategic alternatives for Reebok with a focus on ensuring both Adidas and Reebok would be well-positioned for sustainable growth. Following this evaluation, Adidas decided to focus its efforts on further strengthening the leading position of the Adidas brand in the global sporting goods market and announced the initiation of a formal process to divest Reebok in February 2021.

“We’ve had our sights set on Reebok for many years, and we’re excited to finally bring this iconic brand into the fold,” said Jamie Salter, founder, chairman and CEO of ABG. “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.”

With Reebok, ABG 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. Reebok’s operations will continue in the U.S. and Canada, Latin America, Asia Pacific, Europe, and Russia.

Known for creating the first spiked running shoe, the first athletic shoe designed specifically for women, and its breakthrough “The Pump” technology, Reebok has a rich and storied fitness heritage and continues to introduce innovations that propel the industry forward.

Reebok currently operates in 80 countries, with approximately 70 percent of its business hailing from outside of the U.S. and Canada. Reebok continues to be a premier destination for athletic and casual offerings, and it is ABG’s goal to maintain the brand’s global footprint across retail, wholesale, and e-commerce channels.

Shaquille O’Neal added, “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.”