The adidas Group bought the distribution rights for the Reebok brand in CIS (Russia, Ukraine, Kazakhstan, Belarus, Uzbekistan, Armenia, Azerbaijan) from ZAO RBK-Retail, Reeboks Russian distributor. Effective January 1, 2007 adidas Ltd., Moscow will become the exclusive distributor of Reebok products in CIS and ZAO RBK-Retail will become a key account for the adidas Group. Financial details of the transaction were kept confidential.
This transaction underscores the Groups strategy to further strengthen its control over its brands globally. Buying out distributors and joint venture partners has proven to be very successful for the Group in recent years. The adidas business in Italy, for example, has more than doubled since the buyout in 2002 and there have been sizable gains in Turkey, Denmark and Portugal where buyouts also occurred in the last five years. And most importantly, in Japan, where the Groups buyout of a distributor in 1999 allowed the adidas team to more proactively control the brand and take over market leadership in the worlds second largest sporting goods market.
Buying out Reebok distributors and joint ventures around the globe is a key component of the integration strategy and will provide the Group with revenue synergies totaling at least 200 million by 2009. Russia and China have been identified as the countries with the biggest opportunities, providing the vast majority of the revenue growth opportunities expected from the buyout of distributors and joint ventures.
ZAO RBK-Retail has been Reeboks distribution partner since 1999. Until the end of 2006, ZAO RBK-Retail will continue to hold the exclusive rights to distribute and market Reebok products.