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Adidas set to buy Reebok..

Scottish Mag

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German sports goods maker Adidas is to buy US rival Reebok in a €3.1 billion (£2.1 billion) deal.


Industry watchers said Adidas, number two in the global sports goods industry, is making the acquisition in order to catch up on the top-selling brand, Nike, in the US.


The deal will more than double Adidas's sales in North America and boost its basketball and sports lifestyle fashion business.


It complements Adidas's strengths in Europe and Asia and its focus on sports such as football.


Adidas is seen as a fashionable and cutting edge brand. Nike, with its swoosh, has a host of endorsements from American sports stars but Adidas believes it can disrupt the Nike success story there.


The acquisition still needs to be approved by Reebok's shareholders - although this is likely - and competition regulators.


With combined 2004 sales of roughly £6.2 billion, the combined group will close in on Nike's $13.7 billion (£7.7bn) in revenues in its 2004/05 business year to May.

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Reebok Then and Now


Reebok's United Kingdom-based ancestor company was founded for one of the best reasons possible: athletes wanted to run faster. So, in the 1890s, Joseph William Foster made some of the first known running shoes with spikes in them. By 1895, he was in business making shoes by hand for top runners; and before long his fledgling company, J.W. Foster and Sons, developed an international clientele of distinguished athletes. The family-owned business proudly made the running shoes worn in the 1924 Summer Games by the athletes celebrated in the film Chariots of Fire.


In 1958, two of the founder's grandsons started a companion company that came to be known as Reebok, named after an African gazelle.


In 1979, Paul Fireman, a partner in an outdoor sporting goods distributorship, spotted Reebok shoes at an international trade show. He negotiated for the North American distribution license and introduced three running shoes in the U.S. that year. At $60, they were the most expensive running shoes on the market.


By 1981, Reebok's sales exceeded $1.5 million, but a dramatic move was planned for the next year. In 1982, Reebok introduced the first athletic shoe designed especially for women; a shoe for a hot new fitness exercise called aerobic dance.


The shoe was called the Freestyle™, and with it Reebok anticipated and encouraged three major trends that transformed the athletic footwear industry: the aerobic exercise movement, the influx of women into sports and exercise and the acceptance of well-designed athletic footwear by adults for street and casual wear.


Explosive growth followed, which Reebok fueled with product extensions - new categories in which it also became a leader. The Freestyle™ is now a "Classic" and is Reebok's best selling athletic shoe of all time. Reebok's performance aerobic shoes have progressed through several generations.


In the midst of surging sales in 1985, Reebok completed its initial public offering (stock symbol is NYSE: RBK). In the late 1980s, Reebok began an aggressive expansion into overseas markets. Its products are now available in more than 170 countries and are sold through a network of independent and Reebok-owned distributors. Reebok is distributed in the following countries in Europe :



- Germany since 1987 - Finland since 1986 - Poland since 1991

- United Kingdom since 1982 - France since 1984 - Portugal since 1987

- Austria since 1988 - Greece since 1987 - Sweden since 1986

- Belgium and Luxembourg since 1987 - Ireland since 1982 - Switzerland/Liechtenstein since 1986

- Cyprus since 1987 - Italy since 1986 - Turkey since 1988

- Denmark since 1984 - Norway since 1986

- Spain since 1987 - The Netherlands since 1987

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