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Founded in 1948 It is the largest sportswear manufacturer

in Europe and was the number 3 sporting-goods maker in US before the acquisition.

 Besides sports footwear, the company also produces other products such as bags, shirts, watches, eyewear, and other sports- and clothing-related goods

In 1960, Joe and Jeff Foster recognised the company Reebok in United Kingdom

It became American sports lifestyle leader

2nd position in North America Proven ability to capitalize on latest

market trends Unique portfolio of exclusive league

licenses in North America

• The deal combines world’s no 2 and no 3 sport shoe and apparel company •Prospects for competing against the Nike as better together than apart• In Europe, Nike surpassed Adidas in the soccer shoe segment for the first time• Adidas No 2 everywhere except US• Nike, largest player in the US

On Aug 3rd 2005 Germany's Adidas-Salomon agreed to buy Reebok International for 3.1 billion euros ($3.78 billion), or $59 a share

A 34% premium over the $43.95 at which its shares closed the day before the announcement

Financing through a mix of debt and equity

 This transaction is about growing the combined entity, and adidas-Salomon did not anticipate significant workforce reductions.

Reebok continued to operate under its name and retained its headquarters in Canton, Massachusetts. 

Adidas has done is to become the clear No. 2 in the U.S. market

World leader in athletic footwear and apparel

Strong positions in three key regions

Better balanced geographic sales mix

New dynamic in N.America

Strategic intent in the global athletic footwear, apparel and hardware markets

The new adidas Group has pro forma aggregate 2004 revenues of €8.9 billion (U.S. $11.1 billion)

Improved their financial strength to drive increased shareholder value

Synergy

Importance of North American region Largest market region with sales

upto $52 bn Represents approximately 50%

of the global sporting goods market

In Europe and Asia, adidas enjoys stronger brand recognition, and has significant marketing expertise and insights.

Adidas expects to use this expertise to further develop Reebok’s global presence

Gives Adidas an opportunity to develop its brand in developing markets, especially in the fashion-oriented markets of Asia like China, Korea, and Malaysia where which Reebok has made great strides with its Yao Ming marketing tie up

More complete coverage of all customer segment

 broader spectrum of productsHighly complementary brand

identitiesMore product at more price pointsBenefit from Reebok's expertise in

Women’s segment Sport lifestyle and leisure 

•Sports performance

•European heritage

•Sports lifestyle inspired

•American sports

•Bigger R&D spent

•More products to capitalize on R&D developments

•New technology development and awareness across brands

Transfer of skill and knowhow

Management of exclusive agreements

More active events calendar

Adidas’ specialization in sports goods channel

Reebok’s insight into department store and general merchandise channels

Potential growth rateGross margin of approx 45-50%Operating margin of around 11 %Double digit net income growth

• Companies would grow as a combined entity but would retain separate management. – Separate headquarters – Individual sales forces– Independent distribution centers – Separate advertising programs

• Continue to sell products under respective brand names and labels

• No workforce reductions by Adidas

• Adidas plans to re-emphasize Reebok brand to target athletics apparel consumers who value individuality of Reebok

• 7 percent fall in the first nine months in Sales of Reebok-branded shoes and other apparel

• Adidas also conceded that Reebok's profit growth in the year 2006 would fall short of initial expectations.

• Sales totaled $1.85 billion (1.52 billion) in the latest quarter, compared with 1.4 billion Euros a year ago.

Financial data in millions of Euros