|The acquisition greatly strengthens Adidas in its battle with Nike for U.S. market share.
"This is a once-in-a-lifetime opportunity," Adidas-Salomon's chairman-CEO, Herbert Hainer, said in a press release. "Adidas-Salomon and Reebok are energetic and growing companies with a shared commitment to innovation, sport performance and sport lifestyle. Together, we will expand our geographic reach, particularly in North America, and create a footwear, apparel and hardware offering that addresses a broader spectrum of consumers and demographics."
"Adidas is the perfect partner for Reebok," Paul Fireman, Reebok's chairman-CEO, said in the same statement. "With Adidas, we are able to offer an enhanced portfolio of global brands that truly addresses the needs of today's and tomorrow's consumers."
Both companies have been powerhouses of sports and celebrity sponsorship, endorsement and event deals. Adidas, for instance, is a sponsor of the 2008 Olympic games in Beijing and includes David Beckham, Andre Agassi and rap star Missy Elliott among its promotional partners. Reebok holds the licenses to clothe teams of the National Football League and National Basketball Association. Its various endorsement deals include Yao Ming, rap artist Jay-Z and Allen Iverson.
Global No. 2
Adidas is the No. 2 global marketer of sporting shoes and apparel behind Nike. Reebok, headquartered in Canton, Mass., is the No. 2 U.S. marketer of athletic shoes.
The sale will boost Adidas' share of the U.S. athletic shoe market to 20% and enhance it competitive position against Nike, which currently dominates the U.S. market.
The acquisition is subject to approval by Reebok's shareholders. Adidas' bid represents a 34.2% premium over Reebok stock closing price yesterday.