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Adidas wins approval to buy Reebok

2006-1-26


German sporting goods firm Adidas-Salomon has won approval from European competition authorities to acquire US rival Reebok in a deal worth US$3.8 billion.

Adidas, the global leader for soccer products and number two in the sports goods market, wants to buy Reebok to close the gap with top rival Nike by having a stronger position in the United States and entering new markets.

"The Commission concluded that the transaction would not significantly impede effective competition in the EEU (European Economic Area) or any substantial part of it," the Commission said in a statement.

The takeover, agreed by the boards of the Boston-based and Bavarian-based companies, will create a company with combined annual sales of some $11.1 billion.

According to adidas, the deal will accelerate its strategic global plans, generate substantial cost savings and incremental revenue and profits from a more complete coverage of all consumer segments.

In North America, which represents around half of the global sporting goods market, the combination will more than double adidas's sales. In Europe and Asia, where adidas enjoys stronger brand recognition the company says it will be able to use its expertise to further develop Reebok's global presence.

 


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