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  • ADIDAS MOVES TO SECOND ON THE SPORTING GOODS LEADER BOARD

              French golf and ski equipment company Salomon has been
         acquired by adidas A.G. in a $1.35B acquisition that makes
         adidas "the world's second-biggest sports goods manufacturer
         after Nike," according to Bowley & Owen of the FINANCIAL
         TIMES. As part of the deal, adidas will be renamed adidas-
         Salomon.  Salomon, the world's largest manufacturer of ski
         bindings, "has recently diversified" into hiking boots,
         bicycle components and snowboarding.  The group also bought
         Taylor Made golf in '84.  In the deal, adidas has agreed to
         buy Sport Developpement, a holding company that owns 38.9%
         of Salomon's "share capital" and 56.2% of its voting rights. 
         A public offering will be made to holders of the remaining
         61.1% as soon as the Sport Developpement deal is approved by
         regulators.  adidas "has ruled out" issuing shares to pay
         for the deal and instead "is expected to" finance the deal
         "through banks loans and cash."  adidas has been "advised"
         by Goldman Sachs (FINANCIAL TIMES, 9/17).
              THE BIZ BUZZ: Banque Nationale de Paris analyst
         Katherine Genis: "Nike and Reebok are going to have to
         follow a strategy like this in the future if they want to
         keep their growth rates up.  There's a limit to the growth
         sports shoes can provide.  They all realize it."  Salomon
         officials said "talks with" adidas were "spurred" after
         reports of talks between Rossignol and Nike.  Nike "declined
         to comment" (Mitchener & Barrett, WALL STREET JOURNAL,
         9/17).  Sporting Goods Intelligence Publisher John Horan:
         "With this one move, Adidas leapfrogs past Nike in the
         sports equipment business" (Bruce Horovitz, USA TODAY,
         9/17).  Germany-based Union Investment Fund Manager
         Christoph Burns: "This is a positive link because Salomon is
         strong where Adidas is weak."  Shares of adidas dropped
         yesterday after the announcement "because of uncertainties
         about whether the purchase price was too high and how Adidas
         would finance the transaction" (BLOOMBERG/N.Y. TIMES, 9/17). 
         NBR's Paul Kangas: "Analysts say the purchase may prompt
         Nike and Reebok to expand their offerings to remain
         competitive" ("Nightly Business Report," 9/16).
              WHAT'S NEXT: Growth from the new partnership "is
         expected to come" from the launch of new products such as
         in-line skates and snowboards, according to AD AGE.  In
         February next year, new in-line skates will be launched
         under the adidas-Salomon name.  AD AGE also adds that
         adidas-Salomon officials were unable to comment on "future
         agency arrangements."  Leagas Delaney is adidas' agency,
         while Salomon uses firms JUMP and Proximite (AD AGE,
         9/17)....The acquisition will not impact Taylor Made
         personnel, as its management team "will remain in place"
         (Escondido (CA) NORTH COUNTY TIMES, 9/16).
    
    

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