Adidas and Reebok: The Perfect Double-Team?
What do you do when you're the world's second biggest brand but you just can't dislodge the market leader from the top spot? How about acquiring the third-placed player and double-teaming? That's precisely what Adidas did when, in 2005, it purchased the U.S.-based Reebok brand for US$3.8 billion in an attempt to challenge the supremacy of Nike.
>From the beginning there were mixed views of the merger. Reebok's shares rose 30 percent on the back of the move. Adidas execs naturally trumpeted it as the best thing since sliced bread, with CEO Herbert Hainer hailing it as “a once in a lifetime opportunity.” Some analysts, though, were puzzled by the acquisition, believing it would weaken both brands. Initially it looked like the naysayers had been proven right as Adidas continued to perform solidly, but Reebok's revenue declined for three straight years.