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
