Adidas AG and Brazilian shoe company Vulcabras SA formed a joint venture to sell Reebok-made products in Brazil and Paraguay. Consequently, Adidas raised its 2008 currency-neutral sales guidance for the Reebok segment to mid- to high-single-digit growth from low- to mid-single-digit. All other guidance for the adidas Group as provided on March 5, 2008 remains unchanged.
Under the terms of the agreement, Pedro Grendene Bartelle will be the president and the chairman of the new joint venture company, which will be governed by a board of directors comprised of Reebok and Vulcabras executives. The joint venture company will commence operations on April 1, 2008. Financial results of the joint venture are planned to be fully consolidated within the adidas Group as of that date.
Vulcabras will continue to supply Reebok products to the joint venture company. Reebok and Vulcabras are also in negotiations to form a joint venture company in Argentina where a Vulcabras subsidiary has been the exclusive distributor of Reebok footwear and apparel since 2004.