YOU ARE HERE: LAT HomeCollections
(Page 2 of 2)

Adidas Steps Up to Buy Reebok for $3.8 Billion

The union could give the combined firm more clout with retailers and reshape the industry.

August 04, 2005|Greg Johnson and Leslie Earnest | Times Staff Writers

The U.S. athletic shoe industry has seen sales increase slightly in recent years, but the average price of a pair of shoes fell 1.6% last year as consumers demanded better value, according to SGMA Inc., a North Palm Beach, Fla.-based industry trade group.

Adidas-Salomon CEO Herbert Hainer said the proposed acquisition represented "a major strategic milestone" for his company, which intends to expand its geographic reach while creating shoes, clothes and goods for a wider range of consumers.

Cost savings would be wrung from manufacturing, distribution and marketing operations, trimming $150 million in annual costs within three years of the deal's completion, he said.

Reebok CEO Paul Fireman described Adidas as "the perfect strategic partner." Fireman and his wife, Phyllis, own 17% of Reebok and together stand to gross more than $790 million if the sale goes through.

For The Record
Los Angeles Times Friday August 05, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 32 words Type of Material: Correction
Adidas-Reebok deal -- A chart in Thursday's Business section with an article about Adidas-Salomon's proposed acquisition of Reebok International gave Adidas' 2004 sales as $7.06 trillion. It should have said $7.06 billion.

Reebok spokeswoman Denise Kaigler said talks between Hainer and Fireman about combining their companies began during last year's Olympics in Athens.

Adidas would maintain its corporate headquarters in Herzogenaurach, Germany, and its North American headquarters in Portland, Ore. Reebok would keep its name and headquarters in Canton, and Paul Fireman would remain as chief executive.

Company executives said they did not anticipate "significant workforce reductions." The deal, which is expected to close early next year, was approved by the boards of both companies but still must be cleared by shareholders and regulatory agencies.



The companies



Founded: 1949

Headquarters: Herzogenaurach, Germany

Major brands: Adidas and TaylorMade-Adidas Golf

2004 Adidas sales: $7.06 trillion

2004 Salomon sales: $890 million*

2004 TaylorMade-Adidas sales: $863 million

Employees: 14,217


Reebok International

Founded: 1958 in Britain

Headquarters: Canton, Mass.

Major brands: Reebok, Rockport, CCM, Jofa, Koho, Greg Norman

2004 footwear sales: $2.43 billion

2004 apparel sales: $1.35 billion

Employees: 9,102


Athletic footwear market share

Based on 2004 global wholesale sales

Nike: 33.2%

Adidas: 15.4%

Reebok: 9.6%

Puma: 6.8%

New Balance: 6.6%

*In May Adidas announced it was selling its Salomon division. The sale is expected to be completed by Oct. 1.

Sources: Company reports, Sporting Goods Intelligence

Los Angeles Times Articles