Adidas-Salomon AG said yesterday that it will buy shoemaker Reebok International Ltd in a 3.1 billion euro (US$3.8 billion) deal, giving the company about 20 percent of the US market and putting it in a position to better challenge leader Nike Inc.
Under the terms of the deal, Adidas will pay US$59 for all of Reebok's outstanding shares, a premium of 34.2 percent.
The deal is subject to regulatory approval in the US and Europe as well as by shareholders. Both companies said the transaction could close during the first half of next year.
"Today's announcement represents a major strategic milestone for our group," said Adidas-Salomon chairman and CEO Herbert Hainer.
"This is a once-in-a-lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry," he said.
Reebok will continue to operate under its own name and its headquarters will remain in Canton, Massachusetts, the companies said. Adidas said it did not expect any significant reductions in the work forces of both companies in the aftermath of the acquisition.
Hainer said the combined company would mean an expanded reach globally, with a sharp push into North America.
"With Reebok, we are advancing our position on the playing field of the sporting goods industry and are improving our financial strength to drive increased shareholder value," he said. "We have long respected Paul Fireman and his team for what they have accomplished at Reebok, and we expect them to be an important part of our group as we bring these two world class organizations together."
Reebok chairman and CEO Paul Fireman said the deal would bring a synergy to the market for sportswear and apparel and put the company on track to take on Nike directly, among others.
"With Adidas, we are able to offer an enhanced portfolio of global brands that truly addresses the needs of todays and tomorrows consumers. As an aspirational global sports performance and lifestyle brand, Reeboks mission is to enroll global youth through sports, music and technology. This complements Adidas' mission to be the leading sports brand in the world with a focus on performance and international presence," he said.
The deal also brings together two impressive stables of athletes and entertainment endorsers. English soccer star David Beckham and rap artist Missy Elliott are under contract to Adidas.
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