Polo Ralph Lauren will purchase Ralph Lauren Footwear Co., Inc., a wholly owned subsidiary of Reebok and Polo's footwear licensee, for a gross purchase price of $110 million, subject to certain closing adjustments. It is expected that the sale will result in a gain to Reebok.
Upon the closing of the transaction, which is expected to occur by the end of the second quarter of 2005, the agreement under which Ralph Lauren Footwear acted as Polo's footwear licensee will terminate. The transaction is subject to the expiration of the waiting period under the Hart-Scott-Rodino Act.
Paul Fireman, Reebok's Chairman and Chief Executive Officer, stated: “The completion of this transaction enables us to focus on the continued growth and development of our core businesses.”
In 1996, Reebok and Polo Ralph Lauren announced that they had entered into an exclusive footwear licensing arrangement that granted Reebok the rights to design, develop, manufacture, market and distribute men's, women's and children's footwear under the Ralph Lauren Footwear label. Reebok International established a separate subsidiary to operate the Ralph Lauren Footwear business.
Credit Suisse First Boston LLC acted as financial advisor to Reebok for this transaction.
