SBD/Issue 89/Finance

Reebok Shareholders Approve adidas-Salomon Merger

Adidas, Reebok Hope To
Close Merger By Month’s End
Reebok shareholders approved the $3.8B takeover of the company by adidas-Salomon by a 98% margin, “a day after adidas won European Union regulatory approval,” according to William McCall of the AP. No “antitrust objections were raised” by U.S. regulators. Reebok said the companies expect the deal to close by January 31, “a quick conclusion they hope will end the uncertainty that had hurt sales and orders to retailers.” Reebok “acknowledged three months ago that uncertainty about integration plans had hurt sales,” which dropped to $912M in Q3 ’05 from $1B in Q3 ’04. adidas “plans to keep the brand identities separate ... and focus on expanding Reebok sales in Europe and Asia.” adidas Head of Corporate & Global PR Jan Runau noted those are areas “where Reebok is relatively small and adidas is very strong.” Runau said that the merger “should save adidas about $25[M] a year in production and supply-chain costs within three years.” Susquehanna Financial Group analyst John Shanley noted Nike in ’05 lost the market share leadership position in Japan to adidas for the “first time in well over a decade,” while sales have grown in the U.K., Germany and Southern Europe. Shanley said Nike is “either treading water or losing position” in those markets. Runau said that Reebok’s HQs “will remain in Massachusetts, while adidas will maintain its separate U.S. [HQs] in Portland” (AP, 1/26). Nike, adidas and Reebok U.S. teen buyer demographics.

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Related Topics:

Adidas, Finance, Nike, Reebok

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