After months of speculation over where Reebok would eventually land, Adidas inked a deal to sell the footwear and athleisure brand repped by pop-culture superstar Cardi B.
The German athletic powerhouse announced Thursday a definitive agreement to sell Reebok to Authentic Brands Group (ABG) for “a total consideration of up to 2.1 billion euros,” or $2.46 billion.
ABG owns Barneys New York, Forever 21, Eddie Bauer, Aeropostale, Brooks Brothers and Juicy Couture, as well as active brands like Spyder, Prince and Greg Norman.
Bloomberg reported Adidas was looking to shed Reebok back in October, well over a decade after it bought it for $3.8 billion in 2006. Rumors of a sale grew louder in the following months, with ABG emerging as a contender. Adidas publicly confirmed it was looking to offload Reebok in December and, in February, it began the formal process to divest the brand.
In early July, Reuters reported that Adidas had come up with a shortlist of potential bidders. This list reportedly included a joint venture between ABG and the footwear conglomerate Wolverine Worldwide, which, perhaps not coincidentally, just acquired Sweaty Betty in a move that affords immediate access to the growing athleisure market. Other potential buyers included Advent, CVC, Cerberus and Sycamore, according to Reuters.
Adidas’ announcement of the sale made no mention of Wolverine.
“It’s an honor to be entrusted with carrying Reebok’s legacy forward,” ABG founder, chairman and CEO Jamie Salter said in a statement. “This is an important milestone for ABG, and we are committed to preserving Reebok’s integrity, innovation, and values—including its presence in bricks and mortar. We look forward to working closely with the Reebok team to build on the brand’s success.”
Though the sales price represents a substantial drop from what Adidas spent when it originally bought Reebok a decade and a half a year ago, the total still marks a substantial premium on the 1 billion euros ($1.2 billion) Reuters said it was expected to fetch earlier this summer. Adidas noted that its original acquisition of Reebok included the Rockport, CCM Hockey and Greg Norman brands, which it later divested for a total of 400 million euros ($469 million).
Adidas said the “majority” of the sale will be paid in cash at closing, with the remainder comprised of deferred and contingent consideration. The transaction remains subject to customary closing conditions, but is expected to occur in the first quarter of next year. The company plans to share “the majority” of the cash proceeds received upon closing with shareholders, it said. Adidas noted the sale will have no impact on its financial outlook for the current year or its 2025 financial ambitions.
“Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our company,” Adidas CEO Kasper Rorsted said in a statement. “With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success. As for adidas, we will continue to focus our efforts on executing our ‘Own the Game’ strategy that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our stakeholders.”
Confirmation of ABG’s intent to buy Reebok arrives as the conglomerate prepares to finally go public. The company, which has been eyeing such a move since 2015, filed its IPO prospectus last month with the Securities and Exchange Commission, with eyes on a $10 billion valuation. In its filing, ABG signaled an appetite for future acquisitions, writing “There is a broad range of potential opportunities within lifestyle, entertainment and new verticals that represent compelling candidates for the ABG model.”
Just this June, the company entered into an agreement with Tommy Hilfiger-parent PVH Corp. to buy its Heritage Brands Izod, Van Heusen, Arrow and Geoffrey Beene. The agreement allows for PVH to continue to operate the Heritage dress furnishings business in North America, but gives ABG charge of the labels’ intellectual property.
J.P. Morgan acted as exclusive financial advisor to Adidas and Hengeler Mueller served as legal counsel. BofA Securities and Goldman Sachs & Co. LLC served as financial, strategic and mergers and acquisitions advisors, while also providing committed financing, and KPMG International Limited served as accounting and due diligence advisor for ABG. Latham & Watkins, LLP acted as legal counsel for ABG. According to Adidas, private equity partners BlackRock LTPC, General Atlantic and Leonard Green & Partners, L.P. “played an instrumental role in this partnership.”