The mega-merger between Adidas-Salomon and Reebok International was completed last week, creating a giant new counterpart to Nike, with annual sales of around €9.5 billion. While some observers are afraid that the two brands will cannibalize each other in certain market segments, most of them consider the transaction to be a potentially successful marriage of two different cultures and brand identities, benefiting from a common R&D and sourcing pool. It could set a precedent for other combination in the athletic and non-athletic footwear market.
As expected, the ageing Paul Fireman is stepping down as chief executive of the entire Reebok group, which also includes Rockport, The Hockey Company and other properties. Paul Harrington had previously replaced Fireman in the post of Reebok brand manager. Dennis Baldwin, whose father-in-law is Fireman himself, is now leaving as marketing manager of the Reebok brand. He had been considered to be one of the candidates to replace Fireman.
Erich Stammiger has already been appointed as president and CEO of the Adidas brand. An “integration team” is laying down the options available to put together the two entities. The new brand strategic and the strategic direction of the group will be announced in April, but the European portion of the integration process may be decided already in principle during the month of March.
Over the last months a special working group headed by Roland Auschel, head of Adidas in Europe, and his counterpart at Reebok, David Singleton, have already developed a blueprint precisely outlining the potential benefits of the merger in terms of cost reductions and sales growth. However, they still have to work out specific solutions for each of the national markets.
Meanwhile, coinciding with the completion of the deal and the announcement of Fireman’s retirement, Adidas says that it will replace Reebok as sponsor of the Liverpool FC team from the next playing season. Reebok had extended its endorsement contract with the team for six years in February 2003, and Adidas will probably have no penalties to pay for the change.
