adidas reebok acquisition case study

Adidas and Reebok: Is Acquiring Easier than Integrating?

First Online: 31 December 2018

Cite this chapter

Stefan Schmid 6 ,
Tobias Dauth 7 ,
Thomas Kotulla 6 , 8 &
Philipp Leding 6

Part of the book series: MIR Series in International Business ((MIRSIB))

4556 Accesses

1 Citations

At the beginning of 2006, one of the biggest takeovers in the sporting goods industry took place: the leading German sporting goods company Adidas acquired its U.S. competitor Reebok. Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of the cross-border acquisition. It outlines not only the motives and risks associated with the acquisition but also some major consequences for Adidas’ and Reebok’s strategy, structure and culture. In particular, the case study examines the brand positioning of Adidas and Reebok before and after the acquisition as well as the related challenges. Furthermore, it analyses the integration of Reebok into the Adidas Group between 2007 and 2017, especially in the context of increasing levels of competition, such as competition by industry rivals Nike and Under Armour.

This case study is based on Schmid et al. ( 2011 ).

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Translation of US$ values for “Route 2015” based on exchange rates as of December 31, 2010.

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Adidas’ acquisition of U.S. competitor Reebok represents a major cross-border transaction.

Please discuss the main advantages and disadvantages that may generally exist when acquiring a foreign company.

Which of these advantages and disadvantages were particularly relevant for Adidas’ decision to acquire Reebok? Can you think of other, unmentioned advantages and disadvantages that might have been related to the Reebok acquisition? Please back up your statements with appropriate reasoning.

In 2005, Herbert Hainer said: “The acquisition is a unique opportunity. Retailers will be delighted” (Hofer 2014a , p. 18). At the same time, only some analysts and sporting goods industry experts agreed, whereas others raised doubts regarding the acquisition. In your opinion, were retailers as “delighted about the acquisition” as Hainer expected? And which concerns of analysts and sporting goods industry experts were justified or proved wrong? In your answer, please also take account of the motives and concerns mentioned in the case study.

The brand positioning of Adidas and Reebok shows several similarities and differences.

Please outline and contrast the global brand positioning of Adidas and Reebok after the acquisition.

Comment on the strengths and weaknesses of the positioning after the acquisition with special emphasis on the measures taken by Adidas and Reebok from 2006 onwards. Do you think Adidas and Reebok represent suitable brand complements?

Please imagine you are a sporting goods industry expert and your task is to evaluate the integration of Reebok.

Based on a strategic analysis of the internal situation and the external environment, was the integration of Reebok a success story? Please include examples from the case study in your answer.

What recommendations would you give to CEO Kasper Rorsted with respect to future steps to integrate (or not integrate) Reebok into the Adidas Group? Please make sure to back up your suggestions with reasonable arguments derived from your strategic analysis.

If you were CEO Kasper Rorsted, which strategic decisions would you take over the next 3 years? Please elaborate in detail on corporate, business unit (e.g., for Adidas, Reebok and TaylorMade-Adidas Golf) and selected functional strategies (for instance marketing and purchasing).

Please note that, for some of the questions, the case study is only a starting point. You will have to search for additional information to answer the questions.

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Schmid, S., Dauth, T., Kotulla, T., Leding, P. (2018). Adidas and Reebok: Is Acquiring Easier than Integrating?. In: Schmid, S. (eds) Internationalization of Business. MIR Series in International Business. Springer, Cham. https://doi.org/10.1007/978-3-319-74089-8_2

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Adidas sells Reebok to Authentic Brands for $2.5 billion.

In the past few years, Authentic has acquired Brooks Brothers and Forever 21, adding to a stable that includes Sports Illustrated.

By Lauren Hirsch

Aug. 12, 2021

Sixteen years after acquiring Reebok for $4 billion, the German sportswear giant Adidas is selling it for a little more than half that to Authentic Brands Group , the voracious acquirer of struggling brands.

In the past few years, Authentic has acquired Brooks Brothers and Forever 21 , adding to a stable that includes Sports Illustrated. The acquisition of Reebok for 2.1 billion euros, or $2.5 billion, comes as Authentic is preparing to go public.

“We’ve had our sights set on Reebok for many years,” the chief executive of Authentic, Jamie Salter, said in a statement. “Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also has expansive global distribution.”

Reebok operates in 80 countries, with roughly 70 percent of its business outside the United States and Canada. Its world headquarters will remain Boston.

When Adidas acquired Reebok in 2005, it hoped Reebok could recapture the glory of its 1980s heyday and create a formidable rival to Nike. But the brand got lost inside the broader Adidas empire and struggled to connect with consumers. Sales of Reebok fell 19 percent in 2020 to 1.41 billion euros, from 1.75 billion euros the year before.

“For a given period of time, the brand was probably stronger than the products,” Kasper Rorsted, the Adidas chief executive, said of Reebok in 2016 . “Right now, I would argue that our products are stronger than the brand, and we need to make sure that we reconnect our consumers with the brand that we have.”

Adidas is no stranger to selling off struggling businesses, deals that have been met with varying degrees of success. Its sale of the golf gear brand TaylorMade proved a win for the buyer, the private equity firm KPS Partners, strengthened in part by its deal with Tiger Woods. (KPS has since sold the brand.) But the shoe brand Rockport, which Adidas sold to Berkshire Partners , filed for bankruptcy, blaming its former parent for a sale process that “took meaningfully longer and was significantly more expensive than planned.”

Shaquille O’Neal, whose shoe line with Reebok was introduced in 1992 and who sold a stake in his own brand to Authentic Brands in 2015, celebrated the sale. “It’s a dream come true to welcome this legendary brand to the family,” he said in the statement from Authentic.

Last year, Mr. O’Neal told CNBC that he was intent on owning Reebok, arguing that Adidas had “diluted” it so much “to where it’s almost gone.”

Lauren Hirsch joined the New York Times from CNBC in 2020, covering business, policy and mergers and acquisitions. Ms. Hirsch studied comparative literature at Cornell University and has an M.B.A. from the Tuck School of Business at Dartmouth. More about Lauren Hirsch

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adidas to sell Reebok to Authentic Brands Group

adidas announced today that it has entered into a definitive agreement to sell Reebok to Authentic Brands Group (ABG) for a total consideration of up to € 2.1 billion, with the majority to be paid in cash at closing of the transaction and the remainder comprised of deferred and contingent consideration. The closing of the transaction is subject to customary closing conditions and is expected to occur in the first quarter of 2022. adidas intends to share the majority of the cash proceeds to be received upon closing with its shareholders.

“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. With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success. As for adidas, we will continue to focus our efforts on executing our “Own the Game” strategy that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our stakeholders,” said Kasper Rorsted, CEO of adidas AG.

Jamie Salter, Founder, Chairman and CEO of ABG commented, “It’s an honor to be entrusted with carrying Reebok’s legacy forward. This is an important milestone for ABG, and we are committed to preserving Reebok’s integrity, innovation, and values - including its presence in bricks and mortar. We look forward to working closely with the Reebok team to build on the brand’s success.”

adidas bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey and Greg Norman brands, which adidas later divested for a total consideration of € 0.4 billion. In 2016 Reebok initiated a turnaround plan called "Muscle Up" through which the brand was able to significantly improve its growth and profitability prospects. In March of this year, adidas presented its 2025 “Own the Game” Strategy designed to significantly increase sales and profitability and gain market share by 2025. During the strategy formulation process, adidas assessed strategic alternatives for Reebok with a focus on ensuring both adidas and Reebok would be well positioned for sustainable growth. Following this evaluation, adidas decided to focus its efforts on further strengthening the leading position of the adidas brand in the global sporting goods market and announced the initiation of a formal process to divest Reebok in February 2021.

The sale of Reebok has no impact on adidas’ financial outlook for the current year or the company’s 2025 financial ambition that was announced as part of its Own the Game strategy in March of 2021.

J.P. Morgan acted as exclusive financial advisor to adidas AG and Hengeler Mueller served as legal counsel.

BofA Securities and Goldman Sachs & Co. LLC served as financial, strategic and M&A advisors, while also providing committed financing, and KPMG International Limited served as accounting and due diligence advisor for ABG. Latham & Watkins, LLP acted as legal counsel for ABG. Private equity partners BlackRock LTPC, General Atlantic and Leonard Green & Partners, L.P. also played an instrumental role in this partnership.

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Adidas’ acquisition of reebok was a ‘failure from the start’ — who could be its new owner.

As Adidas considers offloading Reebok, the future of the brand is coming into question.

It’s been nearly 15 years since the Germany-based sportswear giant snapped up the retro athletic label in a $3.8 billion deal that was followed by a period of decreasing revenues and expired licensing contracts with the NFL and NBA.

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Competition,
Competitive Advantage
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Merger and Acquisition Case Study: M&A between Adidas and Reebok

Introduction

In the United States, the sporting goods industry experienced market growth of around 1.4 percent between 2001 and 2002 from $7.29 billion to $7.4 billion respectively (Gieras 3). The said growth of sporting goods industry was attributed to the growth of market size of men and children, 3.7% and 2.8% respectively, which are the main market segment of sporting goods industry. In the United States, sporting goods industry experienced a growth rate of around 2.7% in 2006, which is relatively lower compared to the previous year. In other words, at present, the sporting goods industry in the United States is experiencing slowing growth rate primarily due to the seasonal nature of US market triggered by changing consumption pattern of American consumers, holiday season, and ‘back to school’ season. Furthermore, another reason for the said slowing down of sporting goods industry’s growth in the United States would be due to the market saturation, triggered by tight market competition, that is presently happening in the American domestic market that forces many footwear manufacturers to shift the focus of their operation to international market.

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In order to solve the issue on tight market competition, aside from diverting the focus of operation to international market, would be for companies to merge with one another to expand their market share, improve their profit, outperformed their common competitor, brand development, utilization of competitive advantages of one another, and for achieving sustainable development in the market (Zain 1). Through the said strategy, merging companies can attain better market stance with a corresponding market expansion and less competition. In addition to this, if the resulting merging company will be large enough to dominate the market, then, there is the possibility for them to control the price and supply in the market leading to sustainable development and impressive growth.

It is due to tight market competition posed by Nike and other market players in the sporting goods industry that forced Adidas and Reebok to merge with one another to utilize each other’s competitive advantage and have enough chance of competing at par with Nike – the top manufacturer of sporting goods in the market. Aside from utilizing each other respective competitive advantages, one of the main reasons of Adidas for merging with Reebok was to enhance its market position in the United States. Adidas is a German based country and being considered to be the leading sports goods manufacturer in the European Region while Nike dominates the American Region. With Reebok being one of the top manufacturers of sporting goods in the American market next to Nike; it was a good choice for Adidas to utilize Reebok’s market position to successfully penetrate the American domestic market. The present market share of Nike in the American market is around 40 percent while Adidas and Reebok have 9 percent and 9.2 percent respectively. Though the combined market share of Adidas and Reebok is still less than to that of Nike’s, but it is still enough to shake the market dominance and pose threat to Nike.

Many market analysts and investors believes that the merging of Adidas and Reebok would only caused instability on both companies in the short run period as both companies pass their adjustment period. The difference between the corporate culture of Adidas and Reebok, Adidas runs its operation through the use of technology and performance while Reebok drives its operation by sales and marketing, will provide a hard time for their merging to work efficiently and effectively during the first few years of its operation (Reuters 1). But in the long run, the merging of Adidas and Reebok is being expected to surpass the market performance of Nike. With the combined resources of Adidas and Reebok, they will have a greater grip of European and American market in the next couple of years.

Background Information

Competitive Market of Sporting Goods Industry

The sporting goods industry of United States, compared to other countries, is presently undergoing substantial change as tight market competition, market saturation, and economic condition affects the performance of the entire industry. With the further development of computer technology, to some extent, the sporting goods industry was able to improve its industry performance as it able to use the internet and other e-commerce to boost its sales and provide stronger link between the sports goods manufacturers and sport goods retailers (“Sporting and athletic goods, not elsewhere classified.” 1). In 2003, significant improvement on the retail market of sporting goods was experienced in the United States which provided enough room for sporting goods manufacturers such as Nike, Adidas, Reebok and Puma to regain from the adverse effects of tight competition and market saturation. Sporting goods retailers plays a vital role to the sporting goods industry for it serves as one of the distribution channels of sporting goods manufacturers. In the early 2000’s, the number of sporting goods retailers in the American market increased by 2.9 percent making a total sales of around 1.7 billion USD. There are around 20,000 sporting goods retailing companies operating in the United States with combined annual revenue of $25 billion; athletic footwear and clothing are jointly accounted to 25 percent of the said annual revenue of sporting goods retailing companies (“Sporting Goods Sales Statistics – Outdoor Retail Sales.” 1). Furthermore, the market size of sporting goods industry continues to grow in the American market as men and children market segment recorded market size growth of 3.7% and 2.8% respectively during the early 2000’s. Though seasonal factors adversely affects the competitiveness of sporting goods’ market, but with the development of sporting goods retailing industry plus the technological advantages of sporting goods manufacturers, they were still able to maintain double digit increases on athletic outdoor and sport sandals product categories.

History of Adidas AG

After returning from World War I, Adolf “Adi” Dassler – a German and founder of Adidas, started to produce his own sports shoes in his mother’s wash kitchen. By 1924, Adi Dassler’s brother, Rudolf Dassler, joined his business which started the establishment of Gebrüder Dassler Schuhfabrik “Dassler Brothers Shoe Factory” which successful hit its target market and sold 200,000 pairs of shoes each year before the start of World War II (“Adidas’ History” 1). Though, by 1948, the Dassler brothers did not get on well which led Rudolf to form Puma while Adolf formed Adidas. Adolf Dassler registered his business in August 1949 with a company name of Adidas AG with a retronym of “All Day I Dream about Sports” and three stripes as its official logo. Adidas was able to build its name in the market by sponsoring athletes in Olympics and become well known in the international market. During the 1954 World Cup, Adidas to sponsor the German soccer team which won the said tournament. After seeing all the players of West Germany soccer team wearing Adidas’ black boots, people from all over the world started contacting Adolf Dassler and wants to sell Adidas shoes to their own countries (Barrett 1). The said 1954 World Cup served as the turning point of Adidas and become a well known athletic footwear manufacturer to many countries across the globe.

History of Nike

Nike was founded on January 1964 by University of Oregon’s track athlete Phil Knight and Bill Bowerman, Knight’s coach, with an original name of Blue Ribbon Sports. Blue Ribbon Sports was initially operated as a distributor of Onitsuka Tiger, a Japanese shoe maker, and makes most of its sales during track meets using Knight’s car (“History: Nike’s Heritage.” 1). With the fast growth of Blue Ribbon Sports in the American market, it was able to open its first retail store in Pico Boulevard in Sta. Monica, California by 1966. In 1971, the business relationship of Blue Ribbon Sports and Onitsuka Tiger come to an end and it forced Blue Ribbon Sports to launch its own line of footwear. The first shoe of Blue Ribbon Sports to carry the Swoosh design was a soccer cleat named “Nike” which was released to the public during the summer of 1971. By February 1972, Blue Ribbon Sports introduced its first line of Nike shoes in the market, named after the Greek goddess of victory. Blue Ribbon Sports Inc officially changed its name to Nike Inc by 1978. With a successful product development and marketing strategies, Nike was able to reach its 50% market share of athletic shoe market of United States by 1980 and went public at the end of the said year.

Big 4 Rival Structure

Nike dominates the American sporting goods industry by producing stylish and high quality athletic shoes, apparel, sports equipment, and accessories in the market. With a market capital of $16.4 billion and employing 30,200 workers, Nike has been able to maintain its status for being the top sporting goods manufacturer and outperformed market players in the said industry, e.g. Adidas, Reebok and Puma. On the other hand, aside from Nike, another major market player of sporting goods industry of United States would be the German based company Adidas AG. Adidas boast itself for producing footwear through using technologically advanced machineries and skilled workers. In other words, the competitive advantage of Adidas lies on its technologically advanced machineries and skilled workers. Furthermore, Adidas produces sportswear, footwear and accessories in the market and presently has a strong hold on the European market. Reebok, alternatively, is known for its successful and unique sales and marketing strategies which serves as an avenue for it to have a better market stance in the sporting goods industry. In other words, Reebok has the competitive advantage over Nike and other market players in the United States in terms of sales and marketing strategies; it also produces the same product lines of Adidas. The last but not the least major sporting goods manufacturer would be Puma, which produces sportswear, footwear, and sports equipment and vehicles in the domestic market of United States. Puma boast it self for producing “athleisure” shoes which combines the athletics and leisure style of shoes primarily to attract fashionable customers.

The Sporting Goods Industry

Market Share and Pricing

During the first quarter of 2004, the total market share of Nike in the sporting goods industry already reached to 40% which is 1% higher compared to its market share in 2000 equal to 39% (“Adidas Industry Analysis.” 1). The said improvement on the market share of Nike is being attributed by many market analysts to the successful advertisements of Nike that uses well known athletes and sports idols to endorse their product lines. In terms of prices in the market, generally, Nike sports products are a lot more expensive compared to its competitors specifically to Adidas.

On the other hand, Adidas has around 9.2% of the total market share of sporting goods in the United States during the first quarter of 2004 which is 5.9% lower compared to its market share in 2000 equal to 15.1%. The said down turn on the market share of Adidas in the American market was caused by the slowing growth of American market and tight market competition. In terms of prices, generally, Adidas sports products are relatively cheaper compared to Nike but a bit expensive compared to Reebok.

Reebok, alternatively, has a market share equal to 9% during the first quarter of 2004 which is relatively lower, lower by 3.2%, compared to its market share in 2000 which was equal to 12.2%. Again, just like the case of Adidas, the main factor for the said deterioration of Reebok’s market share was attributed to the slowing growth of the American market and tight competition as Nike continues to dominate the sporting goods industry of United States. In terms of price, generally, Reebok offers the cheapest sports products in the market compared to Puma, Nike, and Adidas. Providing cheaper products in the market is just one of the many marketing and sales strategies of Reebok in order to gain better market position in the United States.

With regards to the market share of Puma in the sporting industry of United States, Puma has 1.1% percent market share during the first quarter of 2004, which is 0.3% lower compared to its market share in 2000 equal to 1.4% (Stevenson 1). The main reason behind the deterioration of Puma’s market share, aside from the slowing growth of American market and tight competition, would be due to the fact that it only concentrated to a limited market segment and product line. The price of Puma’s sport products in the market, in general, is relatively expensive compared to Reebok but cheaper compared to Adidas and Nike.

Oligopoly Behavior

There are some instances wherein threats for new market entrants in the sporting goods industry put Nike, Adidas, Reebok, and Puma into a situation wherein they have to collaborate with one another and utilize their market share in order to prevent the emergence of a given new market players. Nike, Adidas, Reebok, and Puma can control their costs and perform cut throat competition wherein they start lowering the prices of their products in the market in order to attract more customers on their side leaving emerging competitors in the industry with fewer available customers. Emerging competitors oftentimes does not have enough financial capabilities to also lower the prices of their products in the market as much as Nike, Adidas, Reebok, and Puma could do. At the end of the day, with fewer customers and financially vulnerable, new market entrants usually end up bankrupt after these top players of sporting goods industry collude with one another. By the time there will be no threat from emerging competitors; Nike, Adidas, Reebok, and Puma will now set their prices back to its original level before the entry of new market players. Nike, Adidas, Reebok, and Puma perform cut throat competition secretly since the federal government prohibits such act for it impedes market competition and harms consumers in the long run.

Increasing Advertising as a Barrier to Entry

Aside from using cut throat competition in order to prevent the entry of new market players to sporting goods industry, Nike, Adidas, Reebok, and Puma increases their advertising activities in order to put emerging competitors behind their shadows. In the sporting goods industry, advertising is vital for it intensifies bran loyalty of customers in the market. Since emerging competitors do not have enough financial capabilities to hire athletes and sports icons to endorse their products as much as Nike, Adidas, Reebok, and Puma could do, then, there is a great possibility of new market players to experience lower sales and profits. Nike, Adidas, Reebok, and Puma allotted significant amounts of their resources to advertising activities in order to maintain the popularity of their product lines in the market. Furthermore, oftentimes, those companies that has been able to launch striking advertisements on different forms of media experiences higher sales and profits in the market since it is only through advertising where manufacturers can emphasize the uniqueness, differences, and advantages of their products over their competitors. Olympics and World Tournaments are just some of the strategic venues being used by Nike, Adidas, Reebok, and Puma to introduce and launch their new product lines. Sponsoring one team in the Olympics or any World Tournament is already a good chance to advertise product lines in a larger scale and in front of the potential customers in the market. Since sponsoring is too expensive for new market players in the market be able to sponsor one team in the Olympics or any World Tournament, there is a less possibility for them to become successful in the sporting goods industry regardless whether in Europe or in United States.

In this regard, increasing advertisements and cut throat competition are just some of the many ways by which oligopolists: Nike, Adidas, Reebok, and Puma can prevent emerging competitors to gain better market position in sporting goods industry, thereby making the status of barriers to entry on sporting goods industry of United States become high.

Merger History

During the Athens Olympics last 2004, Adidas-Solomon CEO Herbert Hainer and Reebok’s CEO Paul Fireman, accidentally met each other. They had a cup of coffee and discussed about their business, about the market, and their position in the United States vis-à-vis their main competitor – Nike. By November 2004 Paul Fireman invited Herbert Hainer over lunch to discuss the merger of Adidas and Reebok for them to improve their market performance and have enough margins to compete at par with Nike (O’Connell 1). In August 2005, Adidas-Solomon officially announced to the public their plan of acquiring Reebok for worth $3.8 billion (Petrecca 1). By the end of 2005, the deal between Reebok and Adidas was yet to be approved as Reebok’s shareholders and anti-trust authorities reviewed the background and potential market effects of the said merger. By January 25, 2006, the European Commission approved the $3.1 billion takeover of Reebok by Adidas and created the second biggest sports goods firm in the international market (“EU Approves Adidas-Reebok Merger.” 1). And on January 31, 2006, Adidas officially closed the acquisition of Reebok International Ltd making the global athletic footwear, apparel, and hardware markets of Adidas worth $11.8 billion (“ Adidas Reebok Merger Case Study.” 1).

Motives of Adidas and Reebok for Merger

One of the motives of the said merger of Reebok and Adidas would be for Adidas to enhance its market position in the United States. By merging with Reebok, Adidas can utilize the competitive advantage of Reebok in the marketing and sales aspects of operation in the sporting goods industry in United States over Nike (Richardson 1). Furthermore, with the combined market share of Adidas and Nike, around 20% of the total sporting goods industry, Adidas and Reebok can now have enough market force to compete at par with Nike, with 40% market share (Elliott 1). Though at their present condition, the Adidas-Reebok merging will pose a small threat to Nike, but in the long run, many market analysts and shareholders of both Adidas and Reebok, they will be able to have sustainable competitive advantage over Nike after both companies already adjusted to the corporate cultures of one another. Moreover, the merger will be utilized by Reebok by using the technology and patterns for improving the skills of their workers and used it to further develop its product lines especially the women’s wear, and fitness and aerobic sportswear. In other words, the merging of Adidas and Reebok give way for the rise of a sporting goods firm with a competitive advantage on sales, marketing, skilled workers, and technology. Aside from this, the merging of Adidas and Reebok gave way for the booming of their sales and profitability as they combine their market segments from sports minded down to fashionable consumers in the American market.

Effects of Adidas-Reebok Merger on Competition and Welfare

On the perspective of Adidas and Reebok, their merging will result to a lesser market competition between them since they will now start working hand in hand in order to attain their respective goals and objectives in the market. They can now have more resources to compete with Nike and other sporting goods firms in the American market (Walberg 1). On the other hand, based from the point of view of Nike and other sporting goods firms operating in the American market, competition will become tighter as Adidas-Reebok merging can pose enough threat for Nike and others to secure their market status and performance (Talcott 1). With the fusion of Adidas and Reebok’s market share, it can now adversely affect the stability of other market players in the sporting goods industry considering the resulting sporting goods firm of the said merging has competitive advantage on sales, marketing, performance, and technology, resulting to the shifting of customers on the side of Adidas-Reebok. As for the effect of Adidas-Reebok merging on the welfare of consumers in the market, its overall effects depend on how Nike and the rest of the sporting goods industry market players will respond on the merging of Adidas and Reebok. The merging will cause welfare improvement on the part of consumers as Nike and other market players starts operating efficiently – lowering their prices and improve the quality of their products to attract more customers to attract more customers on their sides as market competition becomes tighter. The adverse effects of Adidas-Reebok merging will be discussed on the next part of this paper.

The Collusive Behavior

Antitrust Issue

One of the antitrust issue that Adidas-Reebok merger would be the potential market collusion, or the formation of cartel, of the remaining market players in the American sporting goods industry in order to turn down the competitive advantage of Adidas-Reebok merging. Both the European Union and United States government were at first skeptical about the market effects of Adidas-Reebok merging since the acquisition will give both companies a total of 25% global market share compared to the 33% global market share of Nike and 6.8% global market share of Puma. With the significant threat that Adidas-Reebok can impose on major market players of sporting goods industry not only in the United States but also in the international market, there is a high probability that the remaining sporting goods firms, especially those with relatively smaller market share, will collude and make under the table negotiations to outperform the competitive advantages of Adidas-Reebok merger to protect their interests. If there will be a collusion between the remaining sporting goods firms, the merging of Adidas-Reebok will pose an adverse effect on the welfare of consumers in the market since the said collusion will exploit the vulnerable condition of consumers in the market. But the antitrust regulators in United States and European Union was not concerned about the actual conduct as much as predicting the future conduct of existing mergers in the market, they also do not have enough evidences to prove that merger will facilitate the likelihood of collusion among the remaining competitors in the market that is why the European Union allowed the merging of Adidas and Reebok.

Existence of Market Power

As already mentioned above, the merging of Adidas and Reebok does not only provide greater market share on both companies on the domestic market of United States but also in the international market. The resulting sporting goods firm of Adidas-Reebok merging can almost be considered as large as Nike in the global market considering that the margin of their market shares was trimmed down to 8%. Furthermore, the resulting company of Adidas-Reebok merger has enough financial stability to pay its debts and current liabilities as Reebok acquires the ability of Adidas to pay short term and long term debts. This can be utilized by Adidas-Reebok Company to expand its operation and develop its product lines through borrowing funds from various financial institutions. Moreover, Adidas-Reebok merging is now starting to move its way towards establishing market dominance on the leisure and lifestyle brand of sports products in the market by allowing Reebok to concentrate on rock, music, and technology –came from the side of Adidas. Whereas, Adidas will focus more on superior technology and performance to gain market dominance athletics and sports footwear, plus establishing part of its presence to leisure and lifestyle brand of sports products.

The Synergetic Effect

Methods of Achieving Effective Collusion

One way for Adidas and Reebok to achieve effective collusion would be for them to integrate their respective competitive advantages on one another to improve their productivity and product quality. Reebok must lend its hand to Adidas in improving its marketing and sales strategies while Adidas will provide guidance for Reebok to improve its performance and technology. With this, Reebok and Adidas will be able to utilize their collusion and gain better market position in the sporting industry of United States.

Furthermore, another way by which Reebok and Adidas can achieve effective collusion would be to implement diversity related programs considering their difference in terms of corporate culture and work force diversity. Corporate values of Germans are very much different from the corporate values of Americans. If left untreated, this might serve as the source of workforce instabilities and mismanagement on both sides of the company as their workers and employees will now have to collaborate and work with each other as a team.

Moreover, it is also a must for Reebok and Adidas to act as a “monopolist” in the market. Meaning, if Reebok decided to increase its prices in the market to increase its profit, Adidas must also take corresponding price increase in order to support the said action of Reebok because if not, Reebok will suffer from tremendous amount of sales and profit loss as fewer consumer will buy its products and shifts to either Nike or other market players. Since Adidas and Reebok have enough market shares to force other market players in the sporting goods industry to also increase or decrease their products in the market, it would be now easier for Adidas and Reebok to act as a monopolist in the market.

Scheme to Divide Markets

One way by which Adidas and Reebok can divide the market would be through determining where their product lines are inclined to. Adidas’ product lines are more inclined to athletics and sports apparel and footwear; therefore, it would be best for Adidas to concentrate more on targeting men and children market segment that are include to sports activities. This will provide Adidas to further penetrate the said market segment through the aid of Reeboks marketing and sales strategies. On the other hand, since Reebok’s product lines are more inclined to lifestyle and fashionable category of sports products in the market, it would be better for the said company to concentrate more on targeting women and fashion minded market segment. Through the aid of Adidas’ technology and performance, Reebok will now have enough room to further develop the designs and styles of their product lines through applying technology and high performances on manufacturing the products.

Performance after the Merger

On March 2006, Adidas announced that its profit increased by 26%, to around $636 million but the said profit growth was not attributed to the merging with Reebok. Furthermore, Reebok was the primary cause for a 3.6 percentage-point dip in Adidas-Reebok’s gross margin, to 44.6%. In addition to this, Reebok brand sales fell by 9% to 3.3 million in 2006 while sales of Adidas rose by 14% to 10 million (Holmes & Norton 1). Due to this unsatisfying performance of Reebok on the Adidas-Reebok merging, Herbert Hainer plans to get Reebok back to its growth track through repositioning its brand to widen its appeal to the market (“Adidas-Never give up on an aging champ.” 1). Though it will take time before the reposition of Reeboks brand to provide positive effects on Adidas’ performance, Herbert Hainer is willing to spend significant amount of resources and time to improve the condition of Reebok in the sporting goods industry.

On the fourth quarter of 2007, Adidas reported its net income rose to €21 million from €13 million on the previous year. Furthermore, sales increased to €2.4 billion compared to €2.4 billion a year earlier. Due to this, the total earnings of Adidas for 2007 were €551 million which is 14% higher compared to its earnings in 2006 equal to €483 million. Reebok, on the other hand, recorded sales worth €2.3 billion which is 1 billion lower compared on 2006, equal to 3.3 billion (“Is the Adidas Reebok Merger Working?” 1).

Just like what most market analysts suspected, the early years of Adidas-Reebok merging will only cause instabilities to both companies in terms of sales and revenue as the differences of both firms start to arise and adversely affect their overall operation in the market. But despite of the present bad performance of Adidas-Reebok merging, many still believe that in the few years to come, the said merging of two major sporting goods’ companies will provide benefits to one another and pose enough threat on Nike’s market dominance.

The Prospect of the Merger

In this regard, the real effect of Adidas-Reebok merging can only be revealed in the long run. As of now, Adidas and Reebok do not have enough market capabilities to utilize their merging and compete at par with Nike due to the instabilities that Reebok must face first before allowing Adidas to have greater profit and sales volume.

The Remaining Issues of Integration

Since the merging of Adidas and Reebok is still on its initial stage, its effect on whether it will lead to the formation of cartel of Nike and the remaining sporting goods market players is still a big question for many consumers and market analysts.

Efficiencies of the Industry followed by the Merger

After the merger of Adidas and Reebok, major improvements on the pricing level of sports products in the American market started to arise, leading to the welfare improvement of the sporting goods consumers. Furthermore, quality of Adidas’ and Reebok’s products also improved significantly which forced Nike and the rest of the market players of sporting goods industry to also improve the quality of their product lines to attract more customers on their side. Therefore, at present, the merging of Adidas and Reebok provides positive impacts on the welfare of consumers in the market.

Works Cited

Barrett, Jennifer “A Tale of Two Sneakers: A Family Fight that Created Adidas and Puma.” 14 April 2008. Newsweek.com. 3 June 2008 <http://www.newsweek.com/id/132068?from=rss>.

Elliott, Stuart “Adidas’ Reebok purchase sets a challenge for Nike.” 4 August 2005. The New York Times. 3 June 2008 <http://www.nytimes.com/2005/08/04/business/media/04adco.html?_r=4&fta=y&oref=slogin&oref=slogin&oref=slogin>.

Gieras, Angela “Athletic Footwear Industry.” 17 January 2003. Authorstream.com. 3 June 2008 <http://www.authorstream.com/Presentation/Susann-59481-Athletic-Footwear-Industry-Analysis-Background-Size-Market-footwe-Travel-Places-Nature-ppt-powerpoint/>.

Holmes, Stanley & Norton, Kate “Adidas: Stumbling over Reebok.” 7 March 2007. Business Week. 3 June 2008 <http://www.businessweek.com/globalbiz/content/mar2007/gb20070307_493265.htm?chan=search>.

O’Connell, Patricia “Adidas: If the Shoe Fits…” 8 August 2005. Business Week. 3 June 2008 <http://www.businessweek.com/bwdaily/dnflash/aug2005/nf2005088_0844_db008.htm?chan=search>.

Petrecca, Laura “Adidas-Reebok merger lets rivals nip at Nike’s heels.” 4 August 2005. USAtoday.com. 3 June 2008 <http://www.usatoday.com/money/industries/manufacturing/2005-08-04-adidas-1b-cover-usat_x.htm>.

Richardson, Ben “Adidas bid raises image concerns.” 3 August 2005. BBCnews.com. 3 June 2008 <http://news.bbc.co.uk/2/hi/business/4741343.stm>.

Reuters “Key Facts about Adidas Takeover of Reebok.” 6 January 2006. Crienglish.com. 3 June 2008 <http://english.cri.cn/301/2006/01/26/ [email protected] >.

Stevenson, Seth “How to Beat Nike.” 5 January 2003. The New York Times. 3 June 2008 <http://query.nytimes.com/gst/fullpage.html?res=9C06E5DA143FF936A35752C0A9659C8B63&sec=&spon=&pagewanted=5>.

Talcott, Sasha “Merger likely to heat sports-brands battle.” 4August 2005. Boston.com. 3 June 2008 <http://dinarstandard.com/management/MnA030308.htm>.

Walberg, Robert “Nike finally faces real foe.” 4 August 2005. Moneycentral.msn.com. 3 June 2008 <http://moneycentral.msn.com/content/P125034.asp>.

Zain, Maria “Mergers & Acquisitions: The Rationale and Benefits.” 3 March 2008. Dinar Standard. 3 June 2008 <http://dinarstandard.com/management/MnA030308.htm>.

“Adidas Industry Analysis.” 19 April 2008. Oppapers.com. 3 June 2008 <http://www.oppapers.com/essays/Adidas-Industry-Analysis/143364>.

“Adidas-Never give up on an aging champ.” 26 April 2006. Thecoolhunter.net. 3 June 2008 <http://www.thecoolhunter.net/profiles/ADIDAS—Never-give-up-on-an-aging-champ/>.

“Adidas’ History.” 2008. TheShoeGame.com. 3 June 2008 <http://www.theshoegame.com/Adidas-History.html>.

“Adidas Reebok Merger Case Study.” 3 May 2008. Blogspot.com. 3 June 2008 <http://management-case-studies.blogspot.com/2008/03/adidas-reebok-merger-case-study.html>.

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In January 2002, China Labor Watch2 published a report on working conditions in six factories in China These factories manufactured footwear products for the US-based Reebok International Limited (Reebok), one of the leading footwear and apparel companies in the world. The report highlighted the poor working conditions in these factories. A similar report had been

Athletic Shoe and Reebok

Athletic Shoe

Reebok was founded in Bolton, United Kingdom and is currently headquartered in Canton, Massachusetts. I selected this firm for my report because Reebok manufactures athletic shoes, apparel and accessories some of which I utilize in my life. Reebok is a lesser-known company than a firm like Nike but still is powerful in it’s own right.

How Should Reebok Get Its Market Share Back?

How should Reebok get its market share back? Introduction Reebok International Ltd. is a distributor of sports, fitness, and lifestyle products, and its main products are athlete shoes. Reebok footwear and apparel have been an international brand since 1984. In 2003, its worldwide sales were about $3. 5 billion.? It is a number two brand

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Competition & Consumer Behavior: Reebok-Adidas Merger Case Study

Executive summary, introduction, recommendations.

The case concerning Reebok and its merger with Adidas is well informed and augments the understanding of the impact that technology has on client behavior in marketing. The paper delves into the details presented by the case, which include competition and consumer behavior. Competition is a detail faced by Reebok from dominant companies like Nike. Moreover, the frequent shifts in client behavior lead to complexities, especially whenever the shifts occur unexpectedly. The paper also analyzes the case and provides theoretical implications supported by Ansoff Matrix, which is in resonance with the contents of the case study. The four components outlined by the matrix resonate with the performance of Reebok and its merger with Adidas. Some of the key issues that emerged from the case include innovation and technology. It became evident from the case that innovation has the power to change the company’s performance. Besides innovation, it also emerged from the case that technology has become a dominant player, which dictates the operations in almost every aspect of modern marketing. Notably, the paper clarified that failure to align a firm with the trends posed by technology is a downturn that can initiate a premature exit from the market.

The increasing competition in the market and the trendy changes demonstrated by technology are some of the major issues evident in the case concerning Rebook and Adidas. It is evident from the case that the current situation of Rebook and Adidas has progressed especially in the face of the rising competition from rivals. Notably, Reebok’s merger with Adidas is one of the positive steps that improved its position and market share. From the case, the growth of Reebok, Nike, and Adidas largely hinges on the innovative strategies that addressed client requirements, market trends, and effective use of technology in communication and product development. The case study is important because it helps companies and scholars to understand the issues that dictate the marketing environment and make timely changes that improve their revenues. The case study is also important as it helps the subject companies, which are Reebok and Adidas, to review their position and performance and make amends with the view of propelling their revenues and market share. It is within this backdrop that the case reviews the performance of Reebok, its merger with Adidas, and its probable future.

Details of the Case

Competition and changes in client behavior.

An assessment of the case study brings details that include competition and the changing consumer behavior to the fore. All through the case, competition is a detail that determines the success rate of Reebok and Adidas. Before the merger of Adidas and Reebok, the main competitor was Nike. It is clear from the case that Nike went ahead to surpass the market share enjoyed by Reebok after introducing several innovative strategies. To coin the innovative nature of Nike, which is Reebok’s major competitor, Post explains that in 1990, Nike was enjoying a higher market share as compared to Reebok (5). The explanation substantiates the importance of competition and the role it plays in shaping the company’s performance. It is important to note that competition continued to increase because some start-ups are also introducing new products to the market that appeal to potential clients in terms of price and quality.

Another important detail that is evident from the case is changing client behavior. Since the formation of the company to the present time, consumer behavior has shifted significantly. Presently, clients look at a product from the perspective of quality and the price. The shift in client trends witnessed in the 20th and 21st centuries is highly attributed to the numerous advances in technology. Moreover, online reviews from past users comprise some of the major factors that dictate the product selection process. Post notes that in 1982 when there was a rise in demand for aerobic shoes, Reebok enjoyed a high market share and revenues (1). The high revenues witnessed when aerobic shoes entered the market relate to consumer dynamics and facilitated Reebok’s growth. However, the decline initiated by the change in behavior greatly affected the sales of Reebok shoes. As such, client behavior is one of the details that stem from the case concerning Reebok and Adidas.

Analysis of the Case

The contents of the case study revolve around Reebok’s entry into the market, its progress, the challenges it has experienced, as well as its probable future. In the case study, there is a systematic analysis of how Reebok gained its market share, the various strategies it utilized, and how it eventually merged with Adidas. The analysis provided by the case concerning Reebok amplifies the understanding that individuals have concerning the company and its competitors. A scrutiny of the case proves that since it entered the market, Reebok has faced serious competition from companies like New Balance Inc. and Nike. These competing firms have similar products and use strategies such as celebrity endorsement to attract potential customers. Moreover, it appears that the companies understand the relevance of the right positioning, a factor that helps them make informed adjustments, which improve their reputation before the target clients. A good example took effect when sales representatives from Nike attended meetings with laptops when their counterparts from Reebok came in with bags of shoes.

Therefore, while Nike representatives displayed images of designer shoes using their laptops to the executives in these meetings, those from Reebok were busy removing shoes from their bags. The overall implication of the scenario is a reduced appeal to investors and potential clients. In effect, poor adoption of well-designed strategies led to its merger with Adidas. It is clear from the case that after the merger, the company began to improve in terms of sales and revenues (Post 10). Right timing, employment of well-designed strategies, and implementation of timely redress measures about client feedback are some of the ingredients that Adidas introduced to Reebok’s products to trigger its come back. The contents of the case provide a well-structured discussion of Reebok, Adidas, and the competition it faces from companies like Nike. The case discusses the strengths of Reebok, its merger with Adidas, and its future expectations.

Theoretical Implications

Ansoff matrix and its relevance in the case.

From Reebok and Adidas’s case, the role and implication of the Ansoff Matrix become practical. The matrix highlights various issues such as competition and consumer behavior, which resonate well with the contents of the case. The four components of the matrix that espouse market penetration, product development, market development, and diversification are all visible in the case study. In the early stages when Reebok entered the market, the main concern of the company was to penetrate the market and win the hearts of potential clients. Thereafter, the company focused on developing products that matched with the demands of the clients. The stage of product development is evident as early as 1982 when the company introduced shoes intended to serve aerobic dances.

The introduction of these aerobic designed shoes increased the company’s market share and made it one of the leaders in the industry. Post elucidates that between 1983 and 1995, the revenues earned by Reebok grew from $50 million to $3 billion, a phenomenon that enabled the company to penetrate the market successfully (1). After a successful entry into the market, the company in line with the provisions of the matrix focused on issues like diversification of the market and products. The company started venturing into regions like Asia, North America, and Europe. The expansion is evident when the company experienced invoicing challenges between the United States and Canada (Post 3). Moreover, the contract between Reebok and Yao Ming, a Chinese shoe company, so that it sells its shoes in China is an indication of the diversification (Post 8). The contract resonates well with the diversification, which is one of the stages outlined by Ansoff Matrix. Fundamentally, market and product diversification stages outlined by Ansoff Matrix will help Reebok in the future even after its merger with Adidas.

It is important to state that the role that Ansoff Matrix plays in the stages of Reebok and its progress in the industry affirms its relevance. The resonance witnessed between the contents of the matrix and the progress of Reebok makes it crucial for the case. Moreover, an analysis of the matrix not only helps the company assess its past performance but also enables it to move forward and minimize challenges that can affect its profitability. By using the matrix, which has positive implications, the company can understand its position and the steps to take as it graduates into another stage of the matrix.

The change in the market that affected the growth rate of Reebok was its inability to switch at the right time as per the provisions of the matrix. Post explains that when the sales executives from Nike walked into offices with laptops, those from Reebok walked in with bags of shoes (2). If the company had followed the provisions envisioned in the matrix it would have realized that the times had changed and required the adoption of the right accessories that facilitate efficiency in place of bags of shoes. By using the right measures, competing firms like Nike won deals and improved the scale of their revenues.

Continued Innovation and Impact of Technology

Innovation and technology are among the key issues unearthed from Reebok and Adidas case study. The shifts and trends evidenced in the market are outcomes of technological advancements and innovation. For instance, on the first page, Reebok became innovative and introduced shoes targeting women who loved aerobics, a strategy that was productive (Post 1). Later on, in the case, companies like Reebok, Nike, as well as Adidas used celebrities to endorse their shoe lines. Celebrity endorsement and the introduction of new types of shoes demonstrate continued innovation among the companies highlighted and discussed in the case study. Post asserts that celebrities like LeBron James, Jay-Z, Michael Jordan, and 50 Cent played a role in improving the revenues of Reebok, Adidas, and Nike(9). The endorsement from these celebrities is a sign of creativity that the firms exercised to expand their market share and client base.

Another crucial issue presented by the case is the impact of technology. Notably, technology has played a role in dictating the revenues earned by Reebok, Adidas, and Nike. The late adoption of technological devices by Reebok led to a decline in its sales and introduced an eventual merger with Adidas. When Adidas merged with Reebok the first operations focused on improving the company’s information technology. Post notes that when customers purchasing predator soccer shoes complained that the colors faded quickly, Adidas responded swiftly and provided timely and positive feedback (10). The timely response also indicates the presence of superb platforms that facilitated effective communication between consumers and the company. Presently, several small and large companies experience losses triggered by a slow or delayed response to complaints raised by customers.

Fundamentally, the future of marketing continues to be dynamic and cutthroat. Companies like Reebok and Adidas are likely to experience increased competition especially from startups who capitalize on their high operating costs to introduce low-cost products that match client expectations. Notably, competition from startups will add up to that exerted by large enterprises, which include New Balance Inc. and Nike. As such, some of the recommendations that can help Reebok to improve its market share and profitability include engaging in continued research and the optimal utility of the technology. When Reebok employs these recommendations, the likelihood of improving its share of the market and increasing the scale of its revenues is high.

Due to the ever-changing client expectations and market dynamics, Reebok has to undertake continuous research with the intent of understanding the shifts in the market. Moreover, continuous research enables Reebok to identify areas that need rectifications on time. It is momentous to elucidate that timely amends is a cornerstone that differentiates smart companies from those that are underperforming. Therefore, by engaging in regular research, the company places itself strategically and notices any trends in the market on time. Another important recommendation that is useful in amplifying the reputation and position of Reebok, as well as Adidas, is the optimal use of technology. The impact of technology is practical in almost every aspect of marketing. Shoe companies like Reebok should rely on technology to execute efficient distribution systems, market their product lines, communicate with their clients, and develop high-end products. Therefore, when Reebok uses technology optimally, its shoes will not only match client expectations in terms of quality and quantity but the position of the company in comparison with its competitors improves.

Reebok is one of the leaders in the shoe industry alongside other companies like New Balance Inc. and Nike. Its merger with Adidas gave it a new image and improved its performance in the market. The merger enabled Reebok to challenge the dominance enjoyed by Nike and facilitated a new insight into the changing market forces. Although the company introduced some strategies that facilitated its success, the delay in responding to important ventures and adopting technology was a downturn that worked against its success. One of the examples is evident on page 5 of the case study when Foot Locker went to Nike after Reebok’s reluctance to take up the venture. Although Reebok tried to reestablish good relations with Foot Locker later, the returns were no longer practical. It is important to explain that the company should continue engaging in research to ascertain the market changes and diversify into new regions so that it can increase its profitability and spectrum of operation.

Post, Gerald. “Reebok and Adidas.” Management Information Systems Cases , pp. 1-15.

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Adidas and Reebok: Is Acquiring Easier than Integrating?

Stefan Schmid , T. Dauth , Thomas Kotulla + 1 more authors

Influential Citations

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Key Takeaway : Acquiring a competitor is not always easier than integrating it into the parent company, as the integration process can be complex and challenging.

Adidas Reebok Merger Case Study

March 6, 2008

The sporting goods industry has seen many mergers and acquisitions (M&A) driven by rising competition and industrial growth. In 1997, Adidas acquired the Salomon Group for $1.4 billion. In 2003, Nike acquired Converse for $305 million and in 2004 Reebok acquired The Hockey Company for $330 million.

Adidas and Reebok – Two mega brands, with great strengths

In August 2005, German adidas-Salomon AG announced plans to acquire Reebok at an estimated value of € 3.1 billion ($3.78 billion). At the time, Adidas had a market capitalization of about $8.4 billion, and reported net income of $423 million a year earlier on sales of $8.1 billion. Reebok reported net income of $209 million on sales of about $4 billion. While analysts opined that the merger made sense, the purpose of the merger was very clear. Both companies competed for No. 2 and No. 3 positions following Nike (NKE).

Competition with Nike and Puma

Nike was the leader in U.S. and had made giant strides in Europe even surpassing Adidas in the soccer shoe segment for the first time. According to 2004 figures by the Sporting Goods Manufacturers Association International, Nike had about 36%, Adidas 8.9% and Reebok 12.2% market share in the athletic-footwear market in the U.S. Adidas was the No. 2 sporting goods manufacturer globally, but it struggled in the U.S. – the world’s biggest athletic-shoe market with half the $33 billion spent globally each year on athletic shoes. Adidas was perceived to have good quality products that offered comfort whereas Reebok was seen as a stylish or hip brand. Nike had both and was a favorite brand because of its fashion status, colors, and combinations. Adidas focused on sport and Reebok on lifestyle. Clearly the chances of competing against Nike were far better together than separately. Besides Adidas was facing stiff competition from Puma, the No. 4 sporting-goods brand. Puma had then recently disclosed expansion plans through acquisitions and entry into new sportswear categories. For a successful merger, the challenge was to integrate Adidas’s German culture of control, engineering, and production and Reebok’s U.S. marketing- driven culture.

The ADDYY and RBK Merger – Impossible is Nothing

On January 31, 2006, adidas closed its acquisition of Reebok International Ltd. The combination provided the new adidas Group with a footprint of around €9.5 billion ($11.8 billion) in the global athletic footwear, apparel and hardware markets.

Adidas-Salomon AG Chairman and CEO Herbert Hainer said, “We are delighted with the closing of the Reebok transaction, which marks a new chapter in the history of our Group. By combining two of the most respected and well-known brands in the worldwide sporting goods industry, the new Group will benefit from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues.”

Hainer also said, “The brands will be kept separate because each brand has a lot of value and it would be stupid to bring them together. The companies would continue selling products under respective brand names and labels.”

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Adidas and Reebok: Is Acquiring Easier than Integrating?
Abstract. At the beginning of 2006, one of the biggest takeovers in the sporting goods industry took place: the leading German sporting goods company Adidas acquired its U.S. competitor Reebok. Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of ...
Adidas sells Reebok to Authentic Brands for $2.5 billion
But the brand got lost inside the broader Adidas empire and struggled to connect with consumers. Sales of Reebok fell 19 percent in 2020 to 1.41 billion euros, from 1.75 billion euros the year ...
adidas to sell Reebok to Authentic Brands Group
adidas bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey and Greg Norman brands, which adidas later divested for a total consideration of € 0.4 billion. In 2016 Reebok initiated a turnaround plan called "Muscle Up" through which the brand was able to significantly improve its growth and profitability prospects.
Adidas sells Reebok for up to €2.1bn to Authentic Brands
Adidas is selling Reebok for up to €2.1bn to US-based celebrity and clothing licensing group Authentic Brands, drawing a line under the German sportswear maker's ill-fated acquisition more ...
Success of International M&As: The case of adidas' acquisition of Reebok
This case study describes how adidas, one of the biggest companies in the sporting goods industry, managed the process of acquiring Reebok and how it deals with the on-going post-merger-integration. In the last few decades, mergers and acquisitions (M&As) have gained in strategic importance as a means of external company growth. Given the high economical impact of the increasing number and ...
Adidas and Reebok: Is Acquiring Easier than Integrating?: Cases on
Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of the cross-border acquisition.
Adidas' Acquisition of Reebok Was a 'Failure From the Start'
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Success of International M&As: The Case of adidas' Acquisition of
Abstract. This case study describes how adidas, one of the biggest companies in the sporting goods industry, managed the process of acquiring Reebok and how it deals with the on-going post-merger-integration. In the last few decades, mergers and acquisitions (M&As) have gained in strategic importance as a means of external company growth.
The adidas-Reebok Merger
Abstract. The case discusses the proposed merger of Reebok International Limited with Adidas-Salomon AG. It describes the recent trends, and studies the ongoing merger in the sporting goods industry. The case presents the rationale behind the decision to merge. Finally, the case ends with a debate on whether the merger would be successful.
Adidas and Reebok: Is Acquiring Easier than Integrating?
At the beginning of 2006, one of the biggest takeovers in the sporting goods industry took place: the leading German sporting goods company Adidas acquired its U.S. competitor Reebok. Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of the cross-border acquisition.
Adidas-Reebok Merger: Sprinting behind Nike
This case Adidas - Reebok Merger, Sprinting behind Nike focus on Adidas, the German sports shoes & apparel company announced its decision to buy Reebok, an American rival for $3.8 billion and create a $10 billion footprint in global athletic footwear, apparel and hardware markets. This case examines the challenges that lay ahead for Adidas in terms of positioning of products, price and brand.
The Adidas
To download The Adidas - Reebok Merger case study (Case Code: BSTR177) click on the button below, and select the case from the list of available cases: OR. Buy With PayPal. ... On August 03, 2005, Adidas-Salomon AG (Adidas), Germany's largest sporting goods maker announced acquisition of the US-based Reebok International Limited (Reebok) for $3 ...
Merger and Acquisition Case Study: M&A between Adidas and Reebok
And on January 31, 2006, Adidas officially closed the acquisition of Reebok International Ltd making the global athletic footwear, apparel, and hardware markets of Adidas worth $11.8 billion (" Adidas Reebok Merger Case Study." 1). Motives of Adidas and Reebok for Merger. One of the motives of the said merger of Reebok and Adidas would be ...
Competition & Consumer Behavior: Reebok-Adidas Merger Case Study
An assessment of the case study brings details that include competition and the changing consumer behavior to the fore. All through the case, competition is a detail that determines the success rate of Reebok and Adidas. Before the merger of Adidas and Reebok, the main competitor was Nike. It is clear from the case that Nike went ahead to ...
Strategic case: Change and change management in adidas AG
CEO—facilitating the acquisition of Reebok in 2006 and thus securing a higher profile for adidas in the United States.4 Not everything went well under Hainer, however; the financial/economic crisis affected the sales and finances of adidas, and Reebok underperformed from the start, its market share in steady decline.
One, two, unbuckle my shoe: Why the Adidas-Reebok gambit failed
Fashion-savvy Reebok had raced ahead of Adidas in the US. Post-acquisition—the deal was completed in 2006—the combined entity had some 20 percent of the US market, and a far better chance of ...
The Adidas
To download The Adidas - Reebok Merger case study (Case Code: BSTR177) click on the button below, and select the case from the list of available cases: ... Mergers and Acquisitions (M&As) had become quite common in the sporting goods industry during the late 1990s and the early 2000s. Adidas acquired the Salomon Group for $1.4 billion in 1997.
Adidas and Reebok: Is Acquiring Easier than Integrating?
At the beginning of 2006, one of the biggest takeovers in the sporting goods industry took place: the leading German sporting goods company Adidas acquired its U.S. competitor Reebok. Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of the cross-border acquisition. It outlines not only the ...
Adidas-Reebok M & A Case Study
Adidas-reebok m & a Case Study - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Scribd is the world's largest social reading and publishing site.
Adidas and Reebok: Is Acquiring Easier than Integrating?
Stefan Schmid, T. Dauth, Thomas Kotulla + 1 more authors. 2018. Cite
Adidas and Reebok Merger
Case Study Abstract. This case study highlights the merger between German sportswear-maker Adidas and Reebok to take on market leader Nike in 2005. Will Adidas' $3.7 billion takeover of Reebok in 2005 be successful or is it hampering the German sportswear-maker's performance? Table of Contents. Introduction
Adidas Reebok Merger Case Study
Adidas Reebok Merger Case Study. March 6, 2008. The sporting goods industry has seen many mergers and acquisitions (M&A) driven by rising competition and industrial growth. In 1997, Adidas acquired the Salomon Group for $1.4 billion. In 2003, Nike acquired Converse for $305 million and in 2004 Reebok acquired The Hockey Company for $330 million.
Case Study: Reebok Acquisition By Adidas
Merger and acquisition (M&A) brought two companies together to work and achieve common objective. This report will analyse a case study of Reebok acquisition by Adidas. And try to find out merger aims and reason and then will analyse extend to which merger achieved success, through the analysis of financial account.

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Adidas and Reebok: Is Acquiring Easier than Integrating?

Key Takeaway : Acquiring a competitor is not always easier than integrating it into the parent company, as the integration process can be complex and challenging.

Adidas Reebok Merger Case Study

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