Authentic Brands Group and Wolverine WorldWide presented a joint offer for 1 billion USD for Reebok, which is currently owned by Adidas. Other entities though appear to be interested in the brand, which was bought in 2006 for 3.8 billion USD by the German group. Adidas has started collecting offers, but closing the deal isn’t as easy as it may looks: let’s see why…
For Reebok
Many names were thrown in the mix, with regards to Reebok’s acquisition. But this week was the one that really got things started: Authentic Brands Group, which owns brands such as Nine West and Drye, collaborated with Wolverine WorldWide, owner of Saucony and Merrell, to offer just slightly more than 1 billion USD. First one to break the news was the New York Post, which also mentions Apollo Global Management’s non-binding offer. Another name was that of Cerberus Capital Management, private equity fund that is allegedly also interested in the British brand. Meanwhile Reuters, also names Chinese organizations Anta Sports and Li Ning, along with Korean Fila. All offers appear to have to be presented by the end of June.
It’s not as easy
Negotiations won’t be simple. According to the New York Post, Reebok’s losses are forcing potential buyers to have the necessary liquidity for the operation: none of them will be able to finance the operation with a loan. Moreover, Adidas expressed the wish to discontinue production of Reebok’s products after the sale, thus forcing the buyer to organize manufacturing. “It’s a real tough deal,” says a source of the NYP. “It’s hard to come up with a value for a company that loses money”. Adidas expects the new owner to bring Reebok to profitability within 5 years from the sale’s closing. The US news source though mentioned that Reebok’s revenue decreased to 1.5 billion USD last year, from the previous 1.8 billion of 2019.
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