Adidas agreed to sell struggling sneaker brand Reebok Thursday for roughly $2.5 billion [€ 2.1 billion], a sum less than what the German multinational initially paid.
Reebok will be bought by Authentic Brands Group, a retail conglomerate that also owns bankrupt brands such as Brooks Brothers, Aeropostale, and Forever 21.
ABG, a family business, is planning for its public debut that could happen as soon as this summer, regulatory filings show.
The closing of the transaction is expected to occur in the first quarter of 2022, according to Adidas. The company said it intends to share the majority of the cash proceeds with its shareholders.
Adidas first floated its intent to divest Reebok in February 2020 after a review of the brand. Around March, Adidas said it had developed a new five-year strategy that involves “further strengthening the leading position of the Adidas brand in the global sporting goods market.”
Adidas bought Boston-based Reebok back in 2006 for $3.8 billion in an attempt to compete with Nike.
But despite recent attempts of Reebok to position itself as a go-to brand for athletic individuals by partnering with UFC and Crossfit, its sales have not been able to keep up.
“With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success,” Kasper Rorsted, CEO of Adidas AG, said in a statement.
Adidas said the sale of Reebok will have no impact on its financial outlook for 2021.