A group of Hong Kong investors and their Abu Dhabi partners are launching a takeover bid for Reebok from Adidas A.G., according to the Wall Street Journal.
Jynwel Capital, the investment arm of the billionaire Low family, and funds affiliated with the government of Abu Dhabi plan to offer 1.7 billion euros (US$2.2 billion) for the brand, the report said, citing people close to the matter.
If successful, the bid would unwind an eight-year-old marriage of sneaker makers that has shown disappointing results.
Adidas acquired Reebok in 2006 for roughly 3 billion euros, aiming to create a footwear and sporting-apparel company that would rival Nike Inc. and have more clout with retailers.
Also, it wanted to Adidas more heft in the United States where it trails Nike. Instead, Nike has gained significant ground against both brands since the deal was struck.
In 2005, the year the deal was announced, Adidas and Reebok ranked second and third in US footwear retail-market share, with 10 percent and 8 percent respectively, according to industry researcher SportsOneSource.
Adidas’s share of that market has fallen to 6 percent this year while Reebok’s is down to 1.8 percent.
Meanwhile, Nike’s market share, including its proprietary Jordan brand, has climbed to nearly 60 percent from 35 percent in 2005.
“There’s always been this complaint around Adidas that it didn’t make products that were appropriate for the US market, and instead tried to impose a world-wide product line on the US,” SportsOneSource analyst Matt Powell said.
The US accounts for roughly 40 percent of the global sneaker market.
Adidas has shrunk Reebok through asset sales and other deals. In 2006, it sold the Greg Norman Collection, a brand of golf apparel. It’s also seeking to sell Rockport, a manufacturer of boat and dress shoes.
Adidas also took over Reebok’s sponsorship contract with the National Basketball Association, and Reebok didn’t renew its sponsorship deal with the National Football League, the report said.
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