Adidas Resume
Adidas
Mr. Hamzah
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University of South Alabama /3/7h’ ce/7 îrš F or more than a decade, adidas AG’s corporate strategy had been focused on making acquisitions that would allow it to surpass Nike as the leader of the global sporting goods industry. The company’s 1998 acquisition of French sporting goods manufacturer and mar keter Salomon SA diversified it beyond footwear and apparel and into ski equipment, golf clubs, bicycle components, and winter sports apparel. The €1.5 billion acquisition allowed adidas to surpass Reebok to become the world’s second largest sporting goods company with 1998 sales of nearly €5.1 billion. However, almost as soon as the deal was consummated, it looked doubt ful that the acquisition would help adidas achieve its strategic intent of becoming the world’s largest seller of sporting goods. Chief concerns with the acquisition were the declining attractiveness of the winter sports industry and integration prob lems between the adidas footwear and apparel business and Salomon’s business units. Not until 2003, five years after the acquisition, had adi das’ earnings per share returned to the level that shareholders enjoyed in 1997. In addition, the company’s stock price failed to return to its 1998 trading range until 2004.
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Adidas management divested all of Salomon’s winter sports and bicycle components brands in 2005 to Amer Sports Corporation for €485 million. The divestiture of Salomon’s win ter sports and bicycle components business made TaylorMade Golf the lone business retained from the company’s 1998 acquisition of Salomon SA. Adidas management followed the divestiture of Salomon business units with the €3.1 billion acquisition of Reebok International Ltd. in 2006. In addition to Reebok branded athletic footwear and apparel, Reebok International also designed, marketed, and sold Rockport
Mr. Hamzah
• • • • • • • • • • • • • • • • • • • • • • • • • • • • •
University of South Alabama /3/7h’ ce/7 îrš F or more than a decade, adidas AG’s corporate strategy had been focused on making acquisitions that would allow it to surpass Nike as the leader of the global sporting goods industry. The company’s 1998 acquisition of French sporting goods manufacturer and mar keter Salomon SA diversified it beyond footwear and apparel and into ski equipment, golf clubs, bicycle components, and winter sports apparel. The €1.5 billion acquisition allowed adidas to surpass Reebok to become the world’s second largest sporting goods company with 1998 sales of nearly €5.1 billion. However, almost as soon as the deal was consummated, it looked doubt ful that the acquisition would help adidas achieve its strategic intent of becoming the world’s largest seller of sporting goods. Chief concerns with the acquisition were the declining attractiveness of the winter sports industry and integration prob lems between the adidas footwear and apparel business and Salomon’s business units. Not until 2003, five years after the acquisition, had adi das’ earnings per share returned to the level that shareholders enjoyed in 1997. In addition, the company’s stock price failed to return to its 1998 trading range until 2004.
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Adidas management divested all of Salomon’s winter sports and bicycle components brands in 2005 to Amer Sports Corporation for €485 million. The divestiture of Salomon’s win ter sports and bicycle components business made TaylorMade Golf the lone business retained from the company’s 1998 acquisition of Salomon SA. Adidas management followed the divestiture of Salomon business units with the €3.1 billion acquisition of Reebok International Ltd. in 2006. In addition to Reebok branded athletic footwear and apparel, Reebok International also designed, marketed, and sold Rockport