Adidas to acquire Reebok

Adidas to acquire Reebok

Adidas-Salomon AG happens to be the world’s second largest sporting-goods maker and one of the top three most popular shoes brand around. Now, they are considering buying out one of the other two brands, Reebok in order to gain and provide decent competition to Nike, which continues to dominate the scenario. The deal can be worth around 3.1 billion euros ($3.8 billion) and with the deal; Adidas should get the much-needed boost in the American market.

The company is offering as much as $59 for each share of Canton, Massachusetts-based Reebok. This is quite a premium over the market price of the Reebok share. They would also be assuming 69 million euros of cash as per the reports from the company released today. The move is also expected to give Adidas around 28 percent of the global $11.5 billion athletic-shoe market share and would be closer to Nike’s 31 percent.

Adidas would also be acquiring Reebok’s clothing business, which are sponsors of the National Football League and the National Basketball Association outfits. The company has suffered massively in this region and the move would boost the confidence of the company in one of the biggest markets for their products.

The news helped Reebok gain immensely in the share market as the price of their share touched $51.80 in extended trading after the official close of U.S. markets. This was a rise of around $7.85. Rumors about the possibility of such a deal were going on since reports came out in leading financial newspapers.