The case discusses the proposed merger of Reebok International Limited with
Adidas-Salomon AG. It describes the recent trends and studies the ongoing
merger in the sporting goods industry. The case presents the rationale
behind the decision to merge. Finally, the case ends with a debate on
whether the merger would be successful.
The story of Adidas dates back to the year 1920 when Adolf Dassler (Adi)
produced a handmade shoe fitted with black spikes. On July 01, 1924, Adi and
his brother Rudolf Dassler (Rudolf) started a company under the name "Dassler
Brothers OHG".
In the year 1927, the company enhanced its capacity by taking
on a new factory on lease. The company's shoes made their debut at the 1928
Olympics in Amsterdam. In 1930, the brothers purchased the factory and named it
"Dassler Brothers Sports Shoe Factory."The company introduced tennis shoes in
1931. In the year 1935, the turnover of the company exceeded 400,000 Reichsmark.
In 1938, a second production facility was bought in Herzogenaurach, Germany.
In 1948, the brothers decided to part ways. By August 18, 1949, Adidas was
registered as a company -'Adi' from Adolf and 'Das' from Dassler. Adi registered
the "Three Stripes"as his official logo (Refer Exhibit II).
Rudolf set up another sporting goods company named Puma. In
1956, Adi's son Horst Dassler (Horst) promoted Adidas strongly during the
Olympic Games at Melbourne. He also signed a licensing agreement with the
Norwegian Shoe factory, located in Gjovik, Norway. In 1959, Horst was assigned
the job of establishing production facilities in France. A factory in
Schweinfeld, Germany was started in the same year. In 1960, Adidas was the
dominant brand at the Olympic Games held in Rome; 75% of the track and field
athletes used Adidas shoes. Adidas stepped into the production of apparel and
balls (soccer balls, basketball balls) in 1961and started manufacturing track
suits in 1962...
More...
THE SPORTING GOODS INDUSTRY
TABLE I COMPARATIVE POSITION IN 2004
THE MERGER
THE SYNERGIES
TABLE II GEOGRAPHIC SALES COMPARISON OF ADIDAS AND REEBOK FOR 2004
INTEGRATION ISSUES
THE TRACK AHEAD
QUESTIONS FOR DISCUSSION
EXHIBIT I - SHARE PRICE MOVEMENT OF ADIDAS-SALOMON AG, AUGUST 2005
EXHIBIT II - THE THREE STIPES LOGO OF ADIDAS
EXHIBIT III - PRODUCT PROFILE OF ADIDAS-SALOMON AG
EXHIBIT IV - FINANCIAL SUMMARY OF ADIDAS
EXHIBIT V - FINANCIAL SUMMARY OF REEBOK
EXHIBIT VI - PRODUCT PROFILE OF REEBOK INTERNATIONAL LIMITED
EXHIBIT VII - CORPORATE MISSION OF ADIDAS
EXHIBIT VIII - FINANCIAL SUMMARY OF NIKE
EXHIBIT IX - TOP SPONSORSHIP DEALS OF ADIDAS, REEBOK AND NIKE
EXHIBIT X - THE SWOOSH LOGO OF NIKE
ADDITIONAL READINGS & REFERENCES
Case Code
BSTR177 Case Length 20 Pages Period 1997-2005 Organization
Reebok International Limited Pub Date 2005 Teaching Note Not Available Countries US,
Germany Industry Footwear and Apparel
Issues
• The recent trends and structure facing the sporting goods industry.
• The reasons for the ongoing mergers and acquisitions in the industry
and its future.
•The rationale behind the Adidas and Reebok merger.
• Whether the merger will be successful in the long-term.
Keywords
Adidas-Salomon AG, Reebok International Limited, Nike International Inc.,
Mergers and Acquisitions (M&As), US Federal Trade Commission, Financial
Performance, Bargaining Power, Distribution Network, Integration Issues,
Footwear and apparel market, Interbrand, Ries and Ries Consulting, Merged
entity, Market Capitalization, Synergies, Herbert Hainer and Paul Fireman.
Please note:
This case study was
compiled from published sources, and is intended to be used as a basis for
class discussion. It is not intended to illustrate either effective or
ineffective handling of a management situation. Nor is it a primary
information source.
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