German sportswear maker Adidas AG plans to sell or spin-off its underperforming Reebok brand, 15 years after it bought the U.S. fitness label to help compete with arch-rival Nike Inc. Adidas said on Tuesday it had decided to begin a formal process aimed at divesting Reebok as part of a five-year strategy it plans to present on March 10, when the company will also publish 2020 results. It will report Reebok as a discontinued operation from the first quarter of 2021. A banking source said the business could be worth around 1 billion euros ($1.2 billion).
“Reebok and Adidas will be able to significantly better realize their growth potential independently of each other,” Chief Executive Kasper Rorsted said in a statement. The company bought Boston-based Reebok for $3.8 billion in 2006, but its sluggish performance led to repeated calls from investors to dispose of the brand.
Options for Adidas include spinning Reebok off as a stand-alone public company, or selling the brand to private equity, another major sports retailer or a multibrand player like VF Corp.
Source: Reuters
By Reporting by Emma Thomasson and Arno Schuetze. Editing by Thomas Seythal and Mark Potter
Can't stop reading? This and all news articles are property of their creators, many are not owned or provided by Private Equity Insider. As an event organizer and community platform, we curate content from reliable sources for your suggested reading, and advise you to read the full articles from the referenced authors and sources.