Adidas has agreed to sell its Reebok business to Authentic Brands Group for up to $2.5 billion.
Now, ABG will pay more than double its initial bid for the footwear and clothing company.
Adidas acquired Reebok in 2005 for $3.8 billion to compete with Nike, but its underwhelming performance sparked a willingness to offload the business.
- The brand suffered more than $100 million in losses in 2020.
- It generated $1.5 billion in revenue last year, down from $1.8 billion in 2019.
- It failed to renew its apparel deal with the UFC after a six-year partnership.
The purchase of Reebok comes as ABG is preparing for an initial public offering with a target valuation of about $10 billion, according to CNBC.
Reebok will add to ABG’s portfolio of more than 30 brands across 5,950 brick-and-mortar stores. The privately-owned brand manager pockets roughly $14 billion in retail sales annually.
ABG owns Sports Illustrated and athletic apparel and equipment brands like Prince Sports, Tapout, and Volcom. Its fashion brands include Nine West, Brooks Brothers, and others.