Adidas said Thursday it has struck a deal to sell struggling sneaker and sportswear brand Reebok to Authentic Brands Group for up to €2.1 billion, or about $2.5 billion.
With the sale, Reebok becomes part of a retail conglomerate that has picked up many bankrupt brands, such as Brooks Brothers, Aeropostale and Forever 21. Authentic Brands is gearing up for an initial public offering that could come this summer.
The acquisition of Reebok is expected to close in the first quarter of 2022, Adidas said in a press release. Adidas said the bulk of the acquisition price will be paid in cash when the deal closes. The remainder consists of deferred or contingent considerations, but the terms of that agreement have not been disclosed. Adidas said it will share most of the proceeds from the deal with its shareholders.
German sportswear company Adidas was looking for a way to divest or sell Reebok. It bought the Boston-based company in 2006 for $3.8 billion as a way to grow its business and better fend off sneaker giant Nike. Still, Reebok stumbled on as Adidas’ own core business grew, putting pressure on investors to ditch the lagging brand.
It has previously divested some of the Reebok, Rockport, CCM Hockey and Greg Norman lines.
Jamie Salter, CEO of Authentic Brands, said in a press release that the retail conglomerate will work with Reebok to strengthen its business and maintain its brick-and-mortar stores.