Adidas, the second largest sports clothes manufacturer in the world, has announced it has struck a deal with the American company Reebok for EUR 3.1 billion. The deal has to be agreed by the Reebok shareholders.
Adidas is doing this to increase its share in the US market and to compete with Nike, the largest sports brand in the world. Even after the merger, Nike will still be larger than the combined companies.
Reebok's shares have risen by 16% to $51. Adidas is offering $59 a share.
Herbert Hainer, Adidas CEO, said "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". If the companies combine their sales will be a staggering EUR 9 billion a year.
Winning a bigger share of the North American market is important for Adidas because it accounts for about 50% of the global sporting good market.
When, or if, the bid does go through Adidas will own many well known brands, most noticeably Adidas and Reebok but also Taylormade, Rockport, Greg Norman Collection, Maxfli, CCM, Jofa and Koho.
Earlier this years Adidas profits rose 39%, to EUR 94 million.
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German Adidas buys American Reebok