Adidas AG agreed to sell its underperforming Reebok business to Authentic Brands Group Inc. for up to 2.1 billion euros ($2.5 billion), adding another well-known name to the buyer’s growing lineup of apparel brands.

The majority of the share price will be paid in cash at closing, with the rest coming as deferred and contingent consideration, the companies said Thursday in a statement. The deal is expected to close in the first quarter of 2022.

The German sportswear giant formally began a divestiture of Reebok early this year after trying to revive the brand’s performance for more than a decade. Authentic Brands, which filed recently for an initial public offering in the U.S., has already acquired more than 30 brands, including bankrupt assets such as Barneys New York. Its portfolio companies include Brooks Brothers, Forever 21 and Sports Illustrated.

Adidas shares rose as much as 2.5% to 314.70 euros in Frankfurt trading after the announcement.

Already this year, Authentic Brands has bought Eddie Bauer with Sparc Group, its joint venture with Simon Property Group. Authentic Brands also acquired a collection of brands from PVH Corp. that include Izod and Van Heusen.

Adidas acquired Reebok for $3.8 billion in 2006 and returned the division to profitability in 2018, eking out sales growth of 2% in 2019.

—Bloomberg News

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