Benzinga | Feb 16, 2021 04:21PM EST

Adidas To Sell Reebok Brand, CEO Says Shoe Brands Are Better Off Apart

Adidas (OTC:ADDYY) has announced plans to put its Reebok brand up for sale.

What Happened: The German company acquired the Boston-based Reebok in 2006 for $3.8 billion. While Adidas did not list a potential sales price for the brand, Reuters cited an anonymous "banking source" that said the business could be worth approximately $1.2 billion.

Why It Happened: Adidas said its plans to "focus its efforts on further strengthening the leading position" of its brand in the international sporting goods market.

While Adidas noted that the 2016 turnaround plan dubbed "Muscle Up" helped Reebok to "significantly improve its growth and profitability prospects," the company said it will report Reebok as a "discontinued operation" beginning in the first quarter of 2021.

"The long-term growth opportunities in our industry are highly attractive, particularly for iconic sports brands," said Adidas CEO Kasper Rorsted.

"After careful consideration, we have come to the conclusion that Reebok and Adidas will be able to significantly better realize their growth potential independently of each other. We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it."

Adidas said it's planning to share more details on its post-Reebok plans in a five-year strategic business plan that will be released during a virtual investor and media day on March 10.