In several markets, adidas will continue to operate the business on behalf of ABG during a transition period, following which the Reebok business will fully transfer to ABG’s operating partners via a series of deferred local closings, to take place later this year and in early 2023. In-line with the definitive agreement signed in August 2021, and because of the formal completion of the divestiture, Adidas has now received the majority of the total consideration of up to EUR2.1bn (US$ 2.33bn) in cash, with the remainder comprised of deferred and contingent consideration.  

Adidas originally bought Reebok in 2006, and at the time, the acquisition included the Rockport, CCM Hockey, and Greg Norman brands, which Adidas later divested for a total consideration of EUR0.4bn (US$ 0.44bn) 

In March 2021, Adidas presented its 2025 ‘Own the Game’ Strategy designed to significantly increase sales and profitability and gain market share by 2025. Nonetheless, following the evaluation, Adidas decided to focus its efforts on further strengthening the leading position of its namesake brand and announced the initiation of a formal process to divest Reebok in February 2021. 

Share buyback programme 

Against this background, Adidas is set to launch a new share buyback programme to return the cash proceeds from the Reebok divestiture to its shareholders. Starting in mid-March 2022, the company intends to repurchase own shares in an amount of up to EUR1.5bn (US$ 1.67bn) until the end of the third quarter 2022.   

The decision to repurchase shares will be in addition to the company’s regular buyback activities. In December 2021, Adidas had launched a multi-year share buyback programme under which the company plans to buy back shares in an amount of up to EUR 4bn (US$ 4.45bn) until 2025. The first tranche of this programme was launched on 10 January and completed on 22 February 2022. During that period, the company bought back 4,156,558 shares for a total amount of EUR 1bn (US$ 1.11bn) corresponding to an average purchase price per share of EUR 240.58 (US$ 268.02). 

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“We thank Reebok and the employees who transfer to ABG and its operating partners as a result of today’s closing and acknowledge their contribution to the company over the years and during the transition period,” said Harm Ohlmeyer, CFO of Adidas. “The completion of the divestiture of Reebok is another important milestone in the execution of our strategy Own the Game.” 

Strong shareholder returns are a key component of Adidas’ strategy ‘Own the Game.’ Adidas plans to generate substantial free cash flow until 2025 and return the majority of it – between EUR 8-9bn (US$ 8.91-10.02bn) – to its shareholders via dividend payments and share buybacks. With today’s announcement, these regular shareholder returns are complemented by an additional EUR 1.5bn (US$ 1.67bn) share buyback programme related to the divestiture of Reebok.