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An analysis on the merger of Reebok and Adidas-Salomon AG

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Associate Professor HOD
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General public
Study
marketing
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Osmania...

About the document

Abed A.
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documents in English
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term papers
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6 pages
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General public
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  1. Introduction
  2. European commission approves Adidas-Reebok merger
  3. An overview of the sporting goods industry
    1. Nike
    2. Adidas
    3. Reebok
  4. The merger of Adidas-Reebok
  5. How the deal affects Reebok and Adidas
    1. Integration issues
    2. The track ahead
  6. Financial data of Adidas in 2007
  7. References

The sporting goods industry has seen many Mergers and Acquisitions(M&A) driven by the rising competition and industrial growth. In August 2005,Adidas-Salomon AG (Adidas),Germany's largest sporting goods maker announced acquisition of the US-based Reebok International Limited(Reebok) for $3.8 billion. At the time, Adidas reported a net income of $423 million a year earlier on sales of about $8.4 billion. Reebok reported a net income of $209 million on sales of about $4 billion.

Both companies competed for the No.2 and No.3 positions following Nike which was the common competitor for both Reebok and Adidas. Adidas and Reebok claimed that the merger was decided upon by the realization that their individual goals would be best accomplished by the joining instead of competing. The deal would result in the union of two cutthroat competitors through a ?friendly takeover?.

[...] Adidas-Salmon AG and Ceo Herbert Hainer said are delighted with the closing of the Reebok transaction, which marks a new chapter in the history of our group. By combining two of the most respected and well-known brands in worldwide sporting industry, the new group will benefit from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues.? Adidas and Reebok will essentially operate as two separate brands under Adidas' watch.Hainer said brands will be kept separate because each brand has a lot of value and it would be stupid to bring them together. [...]


[...] of US based Reebok International Ltd ("Reebok") by Adidas-Salomon AG ("Adidas") of Germany. The Commission concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it. The Commission's investigation focused on the market for athletic footwear in Europe, where both Adidas and Reebok are strong players. The investigation showed that there are horizontal overlaps between the activities of Adidas and Reebok. However the market investigation revealed that Adidas and Reebok have slightly different brand and pricing positions. [...]

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