Authentic Brands Will Buy Reebok for $2.5 Billion

Following a highly competitive months-long auction process conducted by parent company Adidas, sneaker brand Reebok finally found a buyer. Authentic Brands Group, which has been scooping up notable retail and consumer brands for the past decade, is making its largest purchase to date with the acquisition valued at about $2.5 billion (€2.1 billion). The all-cash deal is expected to close in the first quarter of 2022, with Reebok's headquarters remaining in Boston. A global footprint A spokesperson for the brand management firm said Reebok was particularly attractive given its large international footprint. Reebok operates in 80 countries and 70% of its sales are generated outside of the U.S. and Canada. Authentic Brands Group Taps Massive Potential of NFTs "We’ve had our sights set on Reebok for many years and we’re excited to finally bring this iconic brand into the fold," said Authentic Brands CEO Jamie Salter in a statement. "Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also has expansive global distribution." Indeed, Salter previously outlined his global ambitions for Authentic Brands to Adweek in early 2020. A familiar playbook The synergies with Authentic Brands' existing portfolio—which includes brands like Sports Illustrated, Shaquille O'Neal's name and likeness, Airwalk, Volcom, Spyder and more—are numerous. Like its other properties, Authentic Brands intends to use a familiar playbook, connecting Reebok to its network of licensees and partners around the world, according to a statement. "This is an important milestone for [Authentic Brands], and we are committed to preserving Reebok’s integrity, innovation and values—including its presence in brick-and-mortar," Salter added. What's different about the purchase of Reebok, as well as outdoor retailer Eddie Bauer, however, is neither is a distressed property. That marks a change in strategy for Authentic Brands, whose appetite for acquisitions is proving insatiable. A rich history Founded by Joe Foster in 1958 in the U.K., Reebok has a storied history. For a stretch during the 1980s the brand even eclipsed Nike in terms of sales. Reebok is primarily known for creating the first spiked running shoe, the first athletic shoe designed for women and the development of a technology it called The Pump, which provided internal inflation so the shoe fits more snugly around the ankle. After falling behind its main rival in the U.S., Reebok was acquired by Adidas by 2006 for $3.8 billion to more effectively compete with Nike. The German athleticwear brand, however, decided to sell Reebok as part of a five-year strategy to focus on its own business. "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," said Adidas CEO Kasper Rorsted in a statement. "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." Why Sneaker Culture Needs to Change for Women