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Money is being thrown around like it’s 1999 again. Reuters reports that Germany’s Adidas-Salomon, the world’s second largest sporting goods company, has agreed to buy U.S. rival Reebok, the world’s third largest sporting goods company, for $3.8 billion. The deal bites at Nike’s butt and promises Adidas a profit jump from United States expansion and entering new markets.
Adidas is buying the outstanding shares of Reebok for $59 per share in cash, a 34% premium to Reebok’s closing share price on Tuesday.
Bigger usually creates a lumbering elephant: not a good thing for running shoes.