November 19, 2018
Originally posted 2018-01-29 11:00:17
By Chloe Coska | amdlawgroup.com
The shares of the German sportswear have jumped after the after the Wall Street Journal reported that an investor group that includes Jynwel Capital and funds affiliated with the Abu Dhabi government planned a $2.2 billion bid to buy Reebok.
Adidas the second largest sports apparel firm behind Nike brought Reebok in August 2005 for $3.8 billion. However, the firm is experiencing difficulties as the unit-sales shrunk by more than a third in 2006 to $2 billion in 2013. Adidas shares are down to 41 percent this year after a series of profit warnings.
Reebok initially double Adidas’ US sales taking over Reebok’s Basketball and Baseball contracts enabling to position the German firm in the world biggest sportswear market. However, the brand lost contracts supply with the NFL league and was hit by the lockout of the Hockey league. This was a big blow for the firm which lead to a steady loss of loss of market share for Adidas in North America in recent years to 5.6 percent in 2013, while Nike has advanced to 19.9 percent, according to Euromonitor data.
Given the fact the firm is experiencing some hardship right this sell could be an advantage according to Warburg Research analyst Joerg Philipp Frey “From the Adidas perspective, that would be a great price. Whether management would accept it is another matter as it
would be an admission of defeat,” he said.
Image credits: “Adidas Logo” by Adidas – http://www.adidas.com/. Licensed under Public domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Adidas_Logo.svg#mediaviewer/File:Adidas_Logo.svg