Adidas Agrees to Sell off Reebok Brand to Authentic Brands Group

Adidas announced this week that it is selling struggling athletic apparel and shoe company Reebok to Authentic Brands Group.

The latter conglomerate owns several bankrupt brands, including Brooks Brothers, Aeropostale and Forever 21.

The acquisition is expected to close in the first quarter of 2022 according to a news release.

Adidas inked a deal to sell Reebok for up to 2.1 billion euros, or roughly $2.5 billion.

With the sale, Reebok will become part of Authentic Brands Group, who is preparing for an initial public offering that could come as soon as this summer.

Adidas said the majority of the acquisition price will be paid in cash when the deal closes.

Per the press release, the remainder is comprised of deferred or contingent consideration, but the terms of that arrangement were not disclosed. Adidas said it will share the bulk of the deal’s proceeds at closing with its shareholders.

Adidas had purchased the Boston-based company in 2006 for $3.8 billion.

Authentic Brands CEO Jamie Salter said in a news release that they will work with Reebok to strengthen its business and maintain its brick-and-mortar stores.

According to a CNBC report, the retail conglomerate is targeting a valuation of about $10 billion in its IPO, said a source, who requested anonymity because the discussions remain private.
The size of the deal could change since it isn’t finalized.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.