The adidas Group has taken control of the distribution and license rights for the Reebok brand in China in mutual agreement with New Point Industrial Limited it. China is one of todays fastest-growing sporting goods markets according to the company.
By concluding the distribution and license contract as well as the related joint venture agreement, the adidas Group will hold the exclusive distribution rights for Reebok products in China as of January 1, 2007. Financial details of the transaction will be kept confidential.
In May 2006, the adidas Group bought the distribution rights for the Reebok brand in Russia, underscoring 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 is one of the key components of the integration strategy and will provide the Group with revenue synergies totaling at least 200 million by 2009. China and Russia were 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.
