Adidas is selling Reebok to Authentic Brands Group for €2.1bn (£1.8bn) as the German sports giant looks to double down on its core brand.
The deal is a significant markdown on the €3.1bn Adidas paid for Reebok in 2006 — a move intended to help compete with rival Nike.
The merger failed to pay off and investors have repeatedly called for the company to offload the brand.
New York-based Authentic Brands has rapidly amassed about 30 labels that are sold at roughly 6,000 stores. This includes clothing chains Forever 21 and Aeropostale, as well as Sports Illustrated magazine.
The company last month filed for an initial public offering in the US following a year of strong profit growth.
“This is an important milestone for ABG, and we are committed to preserving Reebok’s integrity, innovation, and values — including its presence in bricks and mortar,” said Jamie Salter, founder, chairman and chief executive of ABG.
Adidas has already sold the Rockport, CCM Hockey and Greg Norman brands — which were part of the Reebok acquisition — for roughly €400m.
The sportswear group said the sale would have no impact on its outlook for the current financial year or for the targets set out in a five-year strategy in March.
Adidas said the majority of the €2.1bn would be paid in cash at the closing of the transaction, expected in the first quarter of 2022, with the remainder comprised of a deferred and contingent consideration.
It said it would share the majority of the cash proceeds upon closing with its shareholders.