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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (827)	8/3/2005 10:46:21 AM
From: richardred	Respond to of 7256

Adidas to Buy Reebok in $3.8 Billion Deal Wednesday August 3, 10:33 am ET By Matt Moore, AP Business Writer Adidas to Buy Reebok in $3.8 Billion Deal, Giving Co. About 20 Percent of U.S. Market FRANKFURT, Germany (AP) -- Adidas said Wednesday it will buy shoemaker Reebok for $3.8 billion, giving the company about 20 percent of the U.S. market and the potential to better challenge leader Nike Inc. on its home turf. ADVERTISEMENT Under the terms of the deal, Adidas-Salomon AG will pay $59 per share for all of Reebok International Ltd.'s outstanding stock, a premium of 34 percent to Tuesday's closing price, said Adidas Chairman and CEO Herbert Hainer. Shares of Reebok rose $12.79, or 29 percent, to $56.74 in early New York Stock Exchange trading after the news. Adidas shares rose 6 percent to 156.93 euros ($193.11) in Frankfurt trading. "This is a once-in-a-lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry," he said. Reebok's board has signaled its approval of the offer price and approval by the company's shareholders appeared likely, Hainer said. The deal brings together two impressive stables of athletes and entertainment endorsers. English soccer star David Beckham and rap artist Missy Elliott are under contract to Adidas. Reebok sells a line of shoes branded with rapper 50 Cent's G Unit logo and is endorsed by such NBA stars as Allen Iverson and Yao Ming. It also gives Adidas, which has outfitted soccer stars for years, access to Reebok's licenses to clothe players in the National Football League and National Basketball Association and sell the gear to fans. Adidas said it did not expect any significant reductions in the work forces of both companies. Chief Financial Officer Robin Stalker said the deal would likely lead to little if any significant restructuring costs. "I see the synergies very quickly outweighing the costs," he told analysts in a conference call. Hainer said the combined company would have an expanded global reach, with a sharp push into North America. "With Reebok, we are advancing our position on the playing field of the sporting goods industry and are improving our financial strength to drive increased shareholder value," he said. Reebok Chairman and CEO Paul Fireman said the deal would put the company on track to take on Nike directly, among others. "With Adidas, we are able to offer an enhanced portfolio of global brands that truly addresses the needs of today's and tomorrow's consumers," he said. But Gavin Finlayson, an analyst with Commerzbank, said the strategy doesn't appear to make a lot of sense. "This will raise significant debt and a dilution of holdings," he said. "The message Adidas is making is 'We can't cut it alone in the U.S.' " Still, Finlayson said, the combination of the companies could give them more muscle in dealing with suppliers and retailers. "Adidas, in conjunction with Reebok, has the potential to say, 'We want better terms or conditions or we'll take our business elsewhere'," Finlayson said. Paul Altman and Frederick Schmitt of The Sage Group said in an e-mail that the deal would give Adidas and Reebok an improved platform from which to try and chip away at Nike's presence worldwide. The companies together would have about $12.3 billion in annual sales compared with Nike's $13.7 billion, they said. "Adidas would nearly double its U.S. presence," they said. "It currently has $1.9 billion of U.S. sales and Reebok has $1.6 billion of U.S. sales." The deal is subject to regulatory approval in the United States and Europe as well as by shareholders. Both companies said the transaction could close during the first half of 2006. In February, Reebok launched the "I am what I am" marketing campaign, which features pitches from celebrity entertainers and athletes in an effort to draw younger buyers who regard sneakers as high fashion. One of the ads featuring rapper 50 Cent was pulled in March amid complaints that it glorified gun violence. The company said its second-quarter profit soared 71 percent on strong sales driven by its high-performance model shoes and the new marketing campaign. Reebok will continue to operate under its own name and its headquarters will remain in Canton, Mass., the companies said. Meanwhile, the Herzogenaurach, Germany-based Adidas posted a 30 percent gain in second-quarter net profit and improved sales. The company earned 67 million euros ($81.7 million) in the quarter ended June 30, compared with a profit of 45 million euros in the year-ago period. Sales totaled 1.52 billion euros ($1.85 billion) in the latest quarter, compared with 1.4 billion euros a year ago. reebok.com adidas.com nike.com biz.yahoo.com

To: richardred who wrote (827)	2/1/2006 12:56:35 AM
From: richardred	Respond to of 7256

Adidas closes Reebok takeover to take on Nike Tuesday January 31, 11:59 am ET By Ulf Laessing and Mark McSherry FRANKFURT/NEW YORK (Reuters) - German sporting goods maker Adidas (XETRA:ADSG.DE - News) has officially completed its $3.8 billion acquisition of U.S. rival Reebok International (NYSE:RBK - News) in a bid to zero in on market leader Nike (NYSE:NKE - News). Reebok's shareholders and European anti-trust authorities approved the deal last week, clearing the last two hurdles for the biggest sector takeover for years. Adidas, the world's second largest sports goods firm, said in a statement on Tuesday the deal would create group annual sales of about $11.8 billion, coming close to Nike's sales of $13.7 billion in its last fiscal year. "By combining two of the most respected and well-known brands in the worldwide sporting goods industry, the new group will benefit from a more competitive platform," Herbert Hainer, chief executive of the new group, said in a statement. Paul Fireman will step down as chief executive officer of Reebok and serve as Hainer's advisor, Adidas added. Reebok's management has supported the takeover. The German firm, famous for its three-striped sportswear logo, reiterated that it expects the deal to boost earnings in the 2007 fiscal year and lead to cost savings of about $150 million by the third year after closing. Adidas hopes the deal will complement its strength in classic sportswear such as soccer shoes and jerseys with Reebok's strong position in the United States, where Adidas has failed to seriously threaten Nike's position. In addition, Reebok brings strength in the lifestyle fashion market and its women's aerobic business. It also offers key sponsoring contracts with major U.S. professional leagues in hockey, basketball, football and major league baseball. REEBOK INTEGRATION Analysts had expected Adidas to close the deal on Tuesday after Reebok shareholders approved the German firm's offer of $59 per Reebok share in cash last week. Investors had originally been worried that Adidas was taking on too large an integration job while ramping up sales campaigns for the 2006 World Cup. Adidas is pinning great hopes on the biggest sports event for years to be held in its home market. Adidas has allayed some of those fears with forecasts that the deal will boost earnings by a double-digit percentage rate in the medium term. But analysts say they are hoping that Reebok will not require restructuring after it posted an 11 percent sales slump in its third quarter. The company is losing market share at key U.S. retailers to Nike's marquee product lines and more European-style footwear by other shoe manufacturers like Puma. Adidas said teams from both firms have worked in the past few months to ensure a smooth integration of Reebok in the new group, whose headquarters will remain in Herzogenaurach near Nuremberg. Reebok will operate as separate brand based in Canton, Massachusetts. More details of the deal are expected on March 2 when Adidas reports on its fourth quarter at an annual news conference. Effective Tuesday, with the closing of the deal, trading in Reebok's common stock has been halted. biz.yahoo.com