Adidas and Reebok are two of the biggest names in the global sports apparel and footwear market. In 2005, Adidas, a German sportswear company, acquired Reebok, an American sportswear company, in a deal worth $3.8 billion. This acquisition was seen as a major milestone for both companies, as it allowed them to expand their reach and diversify their product offerings.
The acquisition of Reebok by Adidas was seen as a strategic move by the German company. At the time, Reebok was struggling to compete with Nike, the dominant player in the sports apparel and footwear market. By acquiring Reebok, Adidas was able to gain access to Reebok's extensive distribution network and established brand presence in the American market.
In addition to expanding its reach, the acquisition of Reebok allowed Adidas to diversify its product offerings. Reebok had a strong presence in the fitness and casual footwear markets, while Adidas was primarily known for its performance-oriented products. By combining the two companies, Adidas was able to offer a wider range of products to its customers and appeal to a wider range of consumers.
The acquisition of Reebok also allowed Adidas to tap into new areas of growth, such as the growing trend towards athleisure and casual wear. Reebok had a strong presence in these markets, and the acquisition allowed Adidas to capitalize on this trend.
Overall, the acquisition of Reebok by Adidas was seen as a win-win for both companies. It allowed Adidas to expand its reach, diversify its product offerings, and tap into new areas of growth, while also helping Reebok to compete more effectively in the highly competitive sports apparel and footwear market.
Reebok News Stream : Authentic Brands Group Finalizes the Acquisition of Reebok
The acquisition had many strategic benefits such as a more competitive platform worldwide, a well-defined and complementary brand identities, a stronger presence across teams, athletes, events, and leagues, as well as financial benefits such as an accretive deal on an EPS basis, a strong operating cash flow, and substantial operational synergies. And in 2008 group recorded 5 percent growth in euro terms, i. CREDIT: AP As Adidas considers offloading Reebok, the future of the brand is coming into question. In our case, both brands were able to work hand in hand and share their resources and capabilities. Adidas which is European based company is a leader in sports performance and Reebok which is American leader in sports and lifestyle products. This advertisement has not loaded yet, but your article continues below.
Authentic Brands Officially Acquires Reebok From adidas
And operating profit increase by 24. It creates and activates original marketing strategies to drive the success of its brands across all consumer touchpoints, platforms and emerging media. Adidas also said that the group will have more complete product offerings in key sporting categories, extended geographic reach, a more balanced sales profile, and enhanced research and development capabilities. The result was supported by strong sales growth in the Adidas and TaylorMade Adidas golf segment. Article content Revolving door Another problem has been a failure to retain top staff. We will in this part analyze the results of this acquisition to see if adidas is now closer to its competitor Nike.
Adidas wanted to extend their global reach. Broader portfolio of world-renowned brands. Inspite of increase in profit groups gross profit margin declined by 3. This declination was reported due to first time consolidation of the Reebok business, which carried a significant lower operating margin than the group average. The Reebok Classic Leather and Club C have cemented itself as icons within the footwear industry with their timeless and classic designs that first debuted nearly 4 decades ago and continue to be reimagined through unexpected collaborations with world-renowned creatives and design houses.
As Adidas Considers Selling Reebok, Who Could Be Its New Owner?
Passing the baton The day last month of the appointment of Gulden, a 57-year-old Norwegian former professional footballer who engineered a spectacular turnaround at Puma, Adidas shares jumped 20 per cent. It was a power play. In order to compete with Nike, which has very strong market share in North America and globally, Adidas announces the plan to acquire Reebok on 3rd August, 2005, and deal was finalise on 31st January,2006. Last year, Reebok rolled out a newlogo that is an "updated, subtle modern evolution" of the original, which was first introduced in 1992. Following this evaluation, adidas decided to focus its efforts on further strengthening the leading position of the adidas brand in the global sporting goods market and announced the initiation of a formal process to divest Reebok in February 2021. This advertisement has not loaded yet, but your article continues below.
. In 2016 Reebok initiated a turnaround plan called "Muscle Up" through which the brand was able to significantly improve its growth and profitability prospects. Reasons and aims of the merger:- Strategic aims of the merger: Adidas wanted to compete with Nike in North American market. The move also sought to leverage the brand's "most recognisable and distinguished assets" - the vector logo and drop-R wordmark. Morgan acted as exclusive financial advisor to adidas AG and Hengeler Mueller served as legal counsel.
Adidas sells Reebok to US conglomerate after shareholder pressure
In year 2007 and 2008 companies gross profit margin and operating profit margin increased due to cost saving which resulted from the combination of Adidas and Reebok sourcing activities as well as underlying improvement in all segments. A longstanding shortfall in profitability compared with Nike, which for years had been eking out an operating margin of 11-13 per cent, seemed all but closed. Today, adidas may resell Reebok because restructuring Reebok can be a risky and tough challenge. Adidas said the majority of the 2. Enjoyed what you have read? The results of the acquisition 15 years after adidas acquired Reebok and expected strategic and financial benefits but what are the results 15 years after? The new logo aimedto spotlight Reebok's heritage, "connecting its rich legacy to its exciting future".
The firm in 2007 reported 2. Therefore, in order to compete with Nike and to achieve stronger position in the market, Adidas and Reebok went for a friendly merger. Recently, the adidas Group said it was reviewing the future of Reebok and considering selling it. And therefore it seemed impossible for two brands to compete with Nike independently. Since announcing its definitive agreement to purchase Reebok in August 2021, ABG has secured a slate of trusted partners including New Guards Group, SPARC Group, Tristate, Trend Marketing, Al Boom Marine, Aditya Birla Fashion Retail Limited, The Falic Group, Accent Group, MGS, Bounty Apparel, Distrinando, SM Retail, CRC Sports, HSV Group, PT Mitra, JD Group and Foot Locker, Inc. Article content That year Adidas doubled down on the brand, which at the time only accounted for about three per cent of sales, ramping up marketing, expanding the trainer collection and boosting supply in markets such as South America and the Middle East. The merger will help to have a stronger presence in American sports and a complete product offering that addresses key sports categories, including running, tennis, hockey, soccer, basketball, training, outdoor, American football and golf 8.
Authentic Brands Group Finalizes The Acquisition Of Reebok
In interviews with 17 current and former executives, many of those who have left the company said Rørsted and his board had positioned Adidas poorly to weather the storm, firing key personnel and becoming over-reliant on the Yeezy cash cow. This seemed to have a definite effect on Adidas and Reebok market share. Posted: March 2, 2022 Source: Authentic Brands Group ABG. Everyone could hear what he was saying outside. But when longstanding Puma boss Björn Gulden steps up to the top job at Adidas next month, he will inherit from Kasper Rørsted a company in crisis whose shares have plunged 54 per cent in a year. This advertisement has not loaded yet, but your article continues below.