Adidas said Thursday that it has struck a deal to sell struggling sneaker and sportswear brand Reebok to Authentic Brands Group for up to 2.1 billion euros, or roughly $2.5 billion.
With the sale, Reebok will become part of a retail conglomerate that has snapped up many bankrupt brands such as Brooks Brothers, Aeropostale and Forever 21. Authentic Brands is preparing for an initial public offering that could come as soon as this summer.
Reebok’s acquisition is expected to close in the first quarter of 2022, Adidas said in a news release. Adidas said the majority of the acquisition price will be paid in cash when the deal closes. 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.
German sportswear company Adidas has been looking for a way to spin off or sell Reebok. It bought the Boston-based company in 2006 for $3.8 billion as a way to bulk up its business and better fend off sneaker giant Nike. Yet the Reebok has limped along as Adidas’ own core business grew, prompting pressure from investors to dump the lagging brand.
It previously divested some of Reebok’s lines, Rockport, CCM Hockey and Greg Norman.
Authentic Brands CEO Jamie Salter said in a news release that the retail conglomerate will work with Reebok to strengthen its business and maintain its brick-and-mortar stores.