Adidas takes over Reebok

The Board of Directors of the German sporting goods concern Adidas has approved the purchase of American counterpart Reebok, the company announced on Wednesday. The transaction is valued at €3.1 billion (£2.15 billion), including the assumption of net cash of €69 million.

The combined forces of Adidas and Reebok will propel the new Group into the second biggest sportswear company after Nike. The Group will benefit from a wider range of products and a well-defined global presence. With combined 2004 revenues of €8.9 billion, the new Adidas Group has significantly enhanced its competitive edge.

"Today's announcement represents a major strategic milestone for our Group," said Adidas-Salomon Chairman and CEO in a statement. "This is a once-in-a-lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry. Adidas-Salomon and Reebok are energetic and growing companies with a shared commitment to innovation, sport performance and sport lifestyle. Together, we will expand our geographic reach, particularly in North America , and create a footwear, apparel and hardware offering that addresses a broader spectrum of consumer and demographics. With Reebok we are advancing our position on the playing field of the sporting goods industry and are improving our financial strength to dirce increased shareholder value."

Hainer added: "We have long respected Paul Fireman and his team for what they have accomplished at Reebok, and we expect them to be an important part of our Group as we bring these two world class organisations together."

"Adidas is the perfect partner for Reebok," said Reebok Chairman and CEO Paul Fireman. "With Adidas, we are able to offer an enhanced portfolio of global brands that truly addresses the needs of today's and tomorrow's consumers. As an aspirational global sports performance and lifestyle brand, Reebok's mission is to enroll global youth through sports, music and technology. This complements Adidas's mission to be the leading sports brand in the world with a focus on performance and international presence. This transaction provides our shareholders with good value for their shares and our employees with an opportunity for an even more exciting future. I am thrilled by the opportunity to work with Herbert Hainer and the Adidas team in our endeavour to take both brands to the next level."

Meanwhile Adidas enjoyed a strong first half, with net income from continuing operations climbing 33 percent to €94 million and net sales up 10 percent on a currency-neutral basis.