The European Commission has unconditionally cleared adidas-Salomon AG's proposed acquisition of Reebok International Ltd. No other anti-trust approvals are required to complete the transaction.

The Commission concluded that the “transaction would not significantly impede effective competition in the EEA or any substantial part of it.”

The statement released by the EC continued, “Reebok and adidas are global players active in the supply of sports and leisure footwear, clothing and equipment. The merger will create one of the leading groups in the European and world markets. The Commission’s investigation focused on the market for athletic footwear in Europe, where both adidas and Reebok are strong players. The investigation showed that there are horizontal overlaps between the activities of adidas and Reebok.

However, the market investigation revealed that adidas and Reebok have slightly different brand and pricing positions. adidas is perceived as a professional, technically oriented brand with strong European roots. Reebok predominantly targets young people and women, is more a “leisure” brand and has a stronger presence in American sports that are not excessively popular in Europe. Partly due to its different heritage, Reebok’s image on the European markets is weaker than those of adidas or the worldwide leader Nike. Also in terms of pricing, adidas is positioned in the medium to high price points, while Reebok is stronger in the low to medium price points.

In those sport shoes categories and price points where both adidas and Reebok are strongest, i.e. medium price points in tennis, basket-ball and workout shoes, the Commission did not find any evidence that the merged entity would be able to increase prices. This is due to the intense competition coming from several players with significant market shares and strong brands.”

“We are excited to have reached this important milestone,” said adidas-Salomon AG Chairman and CEO Herbert Hainer. “We now expect that the transaction will close shortly, following approval of Reebok’s shareholders. To help ensure we hit the ground running on day one, our two companies have jointly developed an integration plan that leverages the talents and expertise of both companies, which we will implement as soon as the transaction closes. We look forward to quickly realizing the many benefits afforded by our combination with Reebok.”

Reebok will hold a Special Meeting of Shareholders to approve the transaction on Wednesday, January 25, 2006. The transaction could close as early as January 31, 2006.