Adidas AG is in talks with Bjorn Gulden from crosstown rival Puma SE to become the new chief executive officer of the larger German sportswear company as it seeks to revive its fortunes.

Gulden is a “potential successor” to current chief executive Kasper Rorsted, Adidas said in a statement.

Adidas shares surged nearly 30 percent earlier Friday following Puma’s announcement that Arne Freundt, its chief commercial officer, would succeed Gulden in the top role at the beginning of next year.

At Adidas, an appointment of Gulden would ease investor concerns about the future after the company said in August it had initiated a search to replace Rorsted. The departing CEO drew criticism for his handling of the relationship with Ye, formerly known as Kanye West. Adidas terminated their partnership, called Yeezy, following antisemitic remarks and other erratic behaviour by the rapper.

Adidas has also suffered setbacks of late in China, once a big growth market, where boycotts of western brands and lockdowns have hit sales.

During his tenure at Adidas, Rorsted presided over a steady increase in the stock, valuing the company at more than €67 billion ($66.5 billion) around this time just last year. Since then, the stock has come back to levels similar to when he took over in 2016.

Gulden is no stranger to Adidas, where he was once senior vice president of apparel and accessories. He later became managing director of footwear retailer Deichmann, where he oversaw US subsidiaries Rack Room Shoes and Off Broadway Shoes. Gulden became CEO of Danish jewellery brand Pandora in 2012 before taking over the leadership of Puma in July 2013.

Adidas and Puma have a decades-long rivalry. The two companies were founded by brothers — Adolf and Rudolf Dassler — who grew to hate each other in the aftermath of World War II.

The competing headquarters are just a short walk from each other, located up a hill from the Bavarian town of Herzogenaurach. The rivalry today is much more cordial than it was for much of the 20th century.

Adidas traded 22% higher late Friday, with Puma down 3%.

By Tim Loh and Eyk Henning

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