Adidas to buy Reebok

The German sporting goods company Adidas-Salomon AG said today it will buy Reebok International Ltd., the second-biggest US maker of athletic footwear, in a $3.8 billion deal, according to published reports.

Under the terms of the all-stock deal, Adidas will pay $59 for all of Reebok's outstanding shares, a premium of 34.2 percent, the Associated Press said. The deal is subject to regulatory approval in the United States and Europe, along with that of shareholders.

Both companies said the transaction could close during the first half of 2006, the Associated Press reported.

Taking over Canton-based Reebok would double Adidas' share of the US athletic shoe market and ratchet up competition with powerhouse rival Nike Inc. A combined company would have had sales of about $9.6 billion last year, compared with about $10 billion for Nike.

Joining the two firms also would likely yield increased clout among retailers, an ability to command shelf space, and better positioning to bid on endorsement contracts.

The Herzogenaurach-based Adidas today posted a 30-percent gain in second-quarter net profit and improved sales, the Associated Press said.

Reebok would be the latest in a series of Massachusetts companies to be acquired by larger out-of-state firms. Last month, Gillette Co. shareholders approved a $57 billion deal to be taken over by Procter & Gamble Co.

Several members of Reebok's board of directors, including Barry Tatelman, chief executive of Jordan's Furniture, and Dorothy Puhy, executive vice president at the Dana-Farber Cancer Institute, declined to comment yesterday.

Reebok shares closed yesterday at $43.95, up $1.19. In after hours-trading, the stock jumped $7.05, or 16 percent, to $51.

Two major beneficiaries of a deal would be Reebok chief executive Paul Fireman and his wife who own about 23 percent of the company, which has a market capitalization of about $2.6 billion.

In its heyday during the 1980s, Reebok was the nation's top athletic footwear maker. But by 2000, sales sank to less than $2.9 billion.

In recent years, however, sales have steadily climbed for Reebok, reaching a record high of $3.8 billion last year. After taking over The Hockey Co. Holdings Inc. of Montreal last year, owner of the CCM and Koho brands, Reebok also became the top hockey equipment maker.

Adidas' US business has also rebounded since 2003. Analysts say Adidas CEO Erich Stamminger is eager to build market share in the United States.

Besides marrying two of the world's best-known athletic brands, the deal would also bring together a roster of athlete and entertainment endorsers, including hip-hop artists Missy Elliott and 50 Cent, and athletes David Beckham and Allen Iverson.

Jenn Abelson can be reached at ableson@globe.com.