Academic Year 2011/2012
Adidas and Reebok Merger
The purpose of this paper is to analyze Adidas acquisition of Reebok and its external and internal consequences that represented an important shock that affected the dynamics and the mechanisms of the sporting industry.
On August 2005 , Adidas-Salomon AG (Adidas) announced the intention to acquire Reebok International Limited (Reebok) for $ 3.8 billion. The goal of this merger was to facilitate the Adidas Group’s strategic intent in the global athletic footwear, apparel and hardware markets. In fact, both companies remarked the complementarity of their missions and activities, that allowed Adidas to benefit from a more competitive platform worldwide, well-defined and complementary brand identities, a wider range of products, and an even stronger presence across teams, athletes, events and leagues, allowing Adidas to compete in a better and stronger way with the giant of the sporting industry, Nike.
“Adidas is the perfect partner for Reebok”, said Paul Fireman, Reebok CEO “ with Adidas we are able to offer an enhanced portfolio of global brands that truly adresses the needs of today’s and tomorrow’s consumers. As an aspirational global sports performance and lifestyle brand, Reebok mission is to enroll global youth through sports, music and technology. This complements Adidas’s mission to be leading sports brand in the world with a focus on performance and international presence”.
Adidas believed that the complementary nature of the two businesses in various geographies, products and consumer segments had the ability to provide a significant opportunity for increased value creation. Managers hoped that through this merger the group could obtain a substantial reduction in costs as well as an increase in revenues and profits, deriving from a more complete coverage of all consumer segments. However the brands of Adidas and Reebok were kept separate because... [continues]
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