Adidas found a buyer for Reebok in the American licensing giant Authentic Brands Group, which said Thursday it would acquire the brand for up to €2.1billion (about $2.5 billion) in a mostly cash deal.

The German sportswear giant had reportedly been looking for a buyer for the smaller American athletic brand since last autumn, as Adidas seeks to focus on its own turnaround efforts coming out of the pandemic. The sale price, though higher than a reported $1 billion bid from ABG in May, is well below the $3.8 billion Adidas paid for the brand in 2005.

For ABG, Reebok is the latest, and among the biggest, acquisitions in a splashy, years-long buying spree that has seen the group pick up everything from Forever21 to Barneys New York and Brooks Brothers. The holding company, once known for buying and licensing famous names, including the image rights for deceased celebrities like Marilyn Monroe, has in recent years grown more ambitious with the brands in its portfolio.

It generated more than $489 million in revenue in 2020, when its brands sold $10 billion worth of products, and its brands now operate more than 6,000 stores. ABG is planning to go public later this year and could seek a valuation as high as $10 billion, according to Bloomberg. ABG reportedly beat out European private equity firm CVC Capital Partners to acquire Reebok, according to Germany’s Manager Magazine, which also reported that Reebok’s management preferred another buyer than ABG.

While ABG often buys brands at their lowest – or even out of bankruptcy – Reebok has shown signs of mounting a recovery after two decades in decline. The brand never achieved the growth its parent expected, as Nike and Adidas gobbled up market share in the sneaker industry, and it became more difficult for smaller brands to land endorsements from top athletes.

Reebok has found success tapping its archive of retro styles, benefitting from the 1990s nostalgia and athleisure trends. It’s also found an audience outside of professional sports in recent years, collaborating on collections with celebrities like Cardi B and boosting its fashion credentials with partnerships with Maison Margiela and Victoria Beckham. Reebok has also invested and expanded its relationship with the designer Kerby Jean-Raymond, who started collaborating with the brand in 2017 and was named its vice president of creative direction in 2020.

Reebok returned to profitability in 2018. In 2020, Reebok generated €1.4 billion (about $1.6 billion) in revenue, down 19 percent year-over-year. However, sales in the first half of 2021 were up 13 percent compared to the same period in 2019.

In its announcement, ABG said it would execute its “core playbook” of setting up licensing deals and working with other partners that “optimize value in the marketplace” for Reebok. It said the brand would continue to be headquartered in Boston’s Seaport neighbourhood, where it moved from the suburbs in 2018 as part of an effort to attract a more dynamic workforce. ABG also said it will work with Adidas, Reebok’s president since 2014, Matt O’Toole, and the existing team through the transition. The deal is due to close in the first quarter of 2022.

With its new owner, Reebok also returns to a closer association with one of its first star athlete collaborators, Shaquille O’Neal, who released a popular shoe line with the brand in the 1990s. The former professional basketball player is a shareholder in ABG, a relationship that started in 2018 when he and the firm created a joint venture to own and manage his personal brand. O’Neal had previously spoken about his desire to own the Reebok brand and return it to its basketball roots, and is expected to collaborate with the brand under its new owner.

“As a longtime partner of Reebok and an owner of ABG, it’s a dream come true to welcome this legendary brand to the family,” he said in a statement.

Editor’s Note: This article was updated on 13 August 2021 to state that ABG’s brands operate more than 6,000 stores.

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