Thursday, August 04, 2005

Adidas to buy Reebok for US$3.8 billion

Wow! This was impressive news in the world of business. I was getting rather tired of hearing how this oil company has bought that oil company, and how this bank did a hostile takeover of that bank. Now we has the athletic apparel world shaken by the recent agreement of sale between Reebok and Adidas.

Both of these brands ruled the sneaker industry in the 1980's. Reebok cornered the market on the Flashdance lovin', pop star worshipping, slouch sock wearin' crowd. I mean you were totally like a nerd or something if you didn't have the cool British flag on your aerobic hightop sneakers. Along with fedoras, Adidas, with the help of Run DMC, went to the top of the emerging hip-hop crowd's ensemble. The 1980's truly were a time of name brand love.

Adidas will also have the privilege in dressing the NFL and NBA as well as the major soccer leagues. Plus, they get the extremely lucrative and very expensive pro-gear lines made available to the public.

Both Reebok and Adidas were always in Nike's rear view mirror. Now it looks like a combined company will give Nike a run for their money.


Piggy and Tazzy said...

I'd like to think that Nike having some healthy competition would result in a little bit of a price war, resulting in less extortionate prices for us punters.

But I'm probably wrong. Less choice brought about by this kind of practise usually results in some kind of price 'fixing' rather than levelling (levelling is what I'd expect with Reebok and Adidas historically being cheaper, usually, than Nike). It will probably end up with us having less choice and the usual inflated prices.

And I won't even mention the slave labour in the sweatshops at the hand of these companies.

The shareholders must be rubbing their hands in glee.

justrose said...

i like hearing about the corporate world from you.

Maidink said...

P&T - IMO, prices have always been fixed at ludicrous levels. Sneakers and athletic wear rank up there with electronic toys on the begging scale from kids to their parents. And with the ridiculous amounts of cash Adidas and Nike will spend on adverts and endorsement royalties, I wouldn't expect a price drop anytime soon.

JR - thanks. I really need to subscribe to the WSJ.