Steady jog at Adidas
German sporting goods company Adidas-Salomon said it was on course to meet its full year targets, despite its proposed €3.1bn (£2.1bn) acquisition of rival Reebok.
Adidas chairman and chief executive Herbert Hainer told investors yesterday that the group remains on course to produce a 20 per cent increase in net income, operating margins of 11 per cent, and sales at “mid-to high single digit growth”.
The company said it would keep to its three year targets, which forecast double-digit net income and sales growth at “mid to high single digit growth”.
American regulatory approval for the purchase has been given, and the company is awaiting approval from the EU competition authorities.
Adidas said that once the deal goes through it expects to make €125m a year in cost savings, but Hainer added: “Growth opportunities are the paramount aim of this transaction.”
Hainer said he had formed an integration team to merge both businesses, lead by a senior Adidas executive and Sharon Bryan, who is the chief financial officer of Reebok’s Rockport brand.
Hainer said the deal would give the enlarged company “a more competitive platform across the world”. He added: “We will have more products, as well as more teams, players and leagues that we sponsor.”
Observers say that a key part of the deal is that Adidas wants to take advantage of Reebok’s good distribution links in America, which account for around 50 per cent of worldwide sporting goods sales, as well as its intention to take on its bigger global sports goods rival, Nike.