Adidas sold Reebok to Authentic Brands for $2.5 billion.

German sportswear giant Adidas is selling Reebok for just over half that, sixteen years after purchasing Reebok for $4 billion. Authentic Brands Groupgreedy buyer of struggling brands.

Over the past few years, Authentic has acquired: the brooks brothers and forever 21by adding it to a barn containing Sports Illustrated. The acquisition of Reebok for 2.1 billion euros, or $2.5 billion, came as Authentic prepared to go public.

“We’ve had our eyes on Reebok for years,” said Jamie Salter, Authentic’s CEO, in a statement. “Not only does Reebok hold a special place in the minds and hearts of consumers around the world, but the brand has extensive global distribution.”

Reebok operates in 80 countries and roughly 70 percent of its business is outside the United States and Canada. The world center will remain in Boston.

when adidas bought Reebok in 2005, He hoped Reebok would recapture the heyday of the 1980s and create a formidable competitor to Nike. However, the brand disappeared into the wider Adidas empire and struggled to connect with consumers. Reebok’s sales fell 19 percent to 1.41 billion euros in 2020, from 1.75 billion euros the previous year.

“For a period of time, the brand was probably stronger than the products,” said Kasper Rorsted, Adidas CEO. 2016. “I’m arguing that right now our products are stronger than the brand and we need to make sure we reconnect our consumers with the brand we have.”

Adidas is no stranger to selling struggling businesses, deals that have met with varying degrees of success. Sale of golf equipment brand TaylorMade proved a win For the buyer, private equity firm KPS Partners was strengthened in part by its deal with Tiger Woods. (KPS has since sold the brand.) But Adidas’ shoe brand Rockport Sold to Berkshire Partnersfiled for bankruptcy, blame your ex-parent For a sales process that “takes significantly longer and is significantly more expensive than planned”.

Shaquille O’Neal, whose shoe line was introduced in 1992 with Reebok, sold shares It celebrated its sale to its own brand, Authentic Brands, in 2015. “It’s a dream come true to welcome this legendary brand into the family,” said Authentic in a statement.

Last year, Mr. O’Neal said CNBC He said he intends to own Reebok, arguing that Adidas has “diluted” it “almost as far as it goes”.