Germany's Adidas to buy U.S. rival Reebok

Reply Wed 3 Aug, 2005 12:53 am
Adidas to Buy Reebok for $3.8 Bln to Challenge Nike

Aug. 3 (Bloomberg) -- Adidas-Salomon AG, the world's second- largest sporting-goods maker, agreed to buy Reebok International Ltd. for about 3.1 billion euros ($3.8 billion) to gain market share in North America and challenge Nike Inc.

Adidas will pay $59 in cash for each share of Canton, Massachusetts-based Reebok, the second-biggest U.S. athletic- shoemaker, and expects to complete the acquisition in the first half of 2006, the Herzogenaurach, Germany-based company said in an e-mailed statement. The offer is 34 percent more than Reebok's closing share price yesterday of $43.95.

Buying Reebok will give Adidas 28 percent of the global $11.5 billion wholesale athletic-shoe market, rivaling Nike's 31 percent share and widening the lead over Puma AG, which is based in the same German city. Adidas will also get Reebok's apparel business, which includes licenses to outfit the National Football League and the National Basketball Association.

Adidas had an 8.9 percent share of the $8.9 billion wholesale U.S. athletic-shoe market last year, according to Sporting Goods Intelligence. Reebok controlled 12 percent and Nike had 36 percent. The combined company would have about $11.7 billion in sales, compared with Nike's $13.7 billion.

Reebok, whose shares have risen 30 percent the past year, said last month that second-quarter profit rose 71 percent, helped by gains in countries such as India and China and new Pump basketball shoes even as U.S. sales of its Classic footwear, the company's biggest business, declined.


The sale might also solve Reebok's succession problem as its 61-year-old founder and chief executive, Paul Fireman, may be ready to retire, said John Horan, publisher of Goods Intelligence in Glen Mills, Pennsylvania. Fireman took over day-to-day management at Reebok last year after then- president and chief operating officer Jay Margolis resigned.

Reebok shares rose as much as $7.85 to $51.80 from $43.95 in extended trading after the official close of U.S. markets. Shares of Beaverton, Oregon-based Nike gained $2.97 to $85.83 and were little changed in extended trading. Adidas's fell 17 cents to 147.73 euros.
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Walter Hinteler
Reply Wed 3 Aug, 2005 12:56 am
Official pressnote:


Herzogenaurach / Canton, MA - The Boards of adidas-Salomon AG and Reebok
International Ltd. decided that adidas will acquire all of the outstanding
shares of Reebok for US$ 59.00 per share in cash. The offer price represents a
premium of 34.2 percent over the closing price of Reebok's stock on August 2,
2005. The transaction value is approximately EUR 3.1 billion (US$ 3.8 billion)
including the assumption of net cash of EUR 69 million (US$ 84 million). The
transaction is subject to the approval of Reebok's shareholders as well as to
the regulatory approvals and customary closing conditions. Both companies
believe that the transaction will close in the first half of 2006.

Further inquiry note:
Henrik Orth
Junior Investor Relations Officer
Telefon: +49(0)9132 84 29 20
E-Mail: [email protected]

emitter: adidas-Salomon AG
Adi-Dassler-Str. 1-2
D-91074 Herzogenaurach
phone: +49 (0)9132 84-0
FAX: +49 (0)9132 84 2241
mail: [email protected]
WWW: http://www.adidas-salomon.de
ISIN: DE0005003404
indexes: Prime Standard, DAX, HDAX, Prime All Share, CDAX
stockmarkets: free trade: Berliner Wertpapierbörse, Hamburger Wertpapierbörse,
Baden-Württembergische Wertpapierbörse, Börse Düsseldorf,
Niedersächsische Börse zu Hannover, Bayerische Börse, Bremer
Wertpapierbörse (BWB), official dealing: Frankfurter
sector: Recreational & Sports goods
language: English
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Walter Hinteler
Reply Wed 3 Aug, 2005 02:26 pm

Source: 'Handelsblatt', 04.08.2005
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Reply Wed 3 Aug, 2005 02:43 pm
I am SO not happy about this. Reebok uses lasts that make shoes that fit my feet. Adidas does not. If Adidas messes with the Reebok lasts, I am going to be furious.
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