In 2006, German sports retailer Adidas (OTC: ADDYY) bought Reebok in order to help the company compete with shoe-giant Nike. Now, after nearly 15 years of less than impressive results, Adidas has sold Reebok to Authentic Brands for almost $2.5 billion, roughly $1.3 billion less than the company paid for it.
"Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our company," CEO of Adidas, Kasper Rorsted, said in a statement. "With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success."
Adidas put Reebok on sale in February as a part of the company's five-year plan for "further strengthening the leading position of the adidas brand in the global sporting goods market."
Reebok's new owner, BlackRock-owned Authentic Brands, carries several other well-known companies and apparel brands, including Eddie Bauer, Forever21, Juicy Couture, Sports Illustrated, and Aéropostale.
The potential sale of Reebok by Adidas has been floated by investors since 2017, but company insiders maintained a positive stance on the brand up until the point it was put on sale in February.
"We will not sell Reebok because we are still very confident that the brand is strategically positioned," Rorsted said at an investor meeting in early 2021. "We are convinced that the measures we take will be successful."
Adidas was somewhat silent on the reasons for the sale, but the brand expected to be a boon for Authentic Brands, according to retail & fashion industry consultant Rick Helfenbein.
"Authentic Brands purchasing of Reebok is really excellent news for a highly valued name," Helfenbein told Yahoo! Finance. "The industry wisdom is that brands only die in their owner's mind, while the public at-large is generally unaware of inter-company transactions. With the muscle behind Authentic Brands, expect Reebok to become a front runner in a very active market."
The sale is expected to be finalized in the first quarter of 2022.
When Adidas bought Reebok, the brand was at its peak, partnering with both the National Basketball Association and National Football League. By 2007, the brand accounted for nearly a quarter of Adidas' total retail sales. By the end of the third quarter of last year, less than 7% of Adidas sales came from Reebok. According to Reuters, Reebok has been valued at $1.2 billion.