UPDATE [31/12/20]: adidas are currently in negotiations with potential buyers to acquire Reebok for US$2.4 billion (AU$3.1 billion)… former NBA player/hip-hop icon – Master P – and former NBA player – Baron Davis.
The speculation has finally been put to rest. adidas have confirmed that while nothing is final at this stage, they are indeed looking to sell off Reebok. According to German publication Manager Magazin, an official decision will be announced at the company’s strategy presentation on March 10th, 2021.
“These strategic alternatives include both a potential sale of Reebok as well as Reebok remaining a part of the company,” adidas noted via press statement before reassuring that nothing is set in stone until March.
Possible buyers include VF Corporations, which recently added Supreme to its stable for US$2.1 billion. This aforementioned stable currently includes such established brands as Timberland, The North Face, and Vanns (meaning it’s far from their first rodeo). Authentic Brands Group is also in the conversation, having previously expressed interest (see the extensive ABG portfolio here).
adidas acquired Reebok back in 2005/2006 for US$3.8 billion in an effort to consolidate the power of both brands and compete against the likes of Nike (particularly in the US). That endeavour, however, has long been a losing battle on Reebok’s part, and investors have apparently been calling for its disposal on numerous occasions for some time now.
In Q2 of this year, Reebok reported a 42% decrease in revenue (COVID-19 peak) and 7% during the most recent quarter. On a separate front, Reebok has also recently ended its partnership with the UFC, which certainly doesn’t bode well for overall brand visibility. And already, markets are optimistic about the outcome of this potential sale for adidas with company shares (ETR: ADS) spiking by over +3% since the news broke.
Let’s see how this plays out.