adidas-Salomon to Combine With Reebok

Both companies’ Board of Directors agreed that adidas-Salomon will acquire all oustanding shares of Reebok International Ltd for US$ 59.00 per share. The announcement was made as adidas-Salomon published their results for the first half of 2005, reporting a record gross margin of 48.5% and a net income rise of 39%.

ADIDAS-SALOMON TO COMBINE WITH REEBOK AND CREATE €9 BILLION FOOTPRINT IN GLOBAL ATHLETIC FOOTWEAR, APPAREL AND HARDWARE MARKETS

Transaction Valued at €3.1 billion (U.S. $3.8 billion) or U.S. $59.00 Per Reebok Share Accretive to adidas’s Earnings Per Share in the First Full Year After Closing HERZOGENAURACH and CANTON, MA (August 3, 2005) – adidas-Salomon AG (DAX:ADSG.DE) and Reebok International Ltd. (NYSE:RBK) today announced that their Boards of Directors have unanimously approved a definitive agreement under which adidas-Salomon AG would acquire all of the outstanding shares of Reebok for U.S. $59.00 per share in cash.

The offer price represents a premium of 34.2% over the closing price of Reebok’s stock on August 2, 2005. The transaction value is approximately €3.1 billion (U.S. $3.8 billion) including the assumption of net cash of €69 million (U.S. $84 million).

The combination of adidas and Reebok accelerates the adidas Group’s strategic intent in the global athletic footwear, apparel and hardware markets. The new Group will benefit from a more competitive platform worldwide, well-defined and complementary brand identities, a wider range of products, and an even stronger presence across teams, athletes, events and leagues. The new adidas Group has pro forma aggregate 2004 revenues of €8.9 billion (U.S. $11.1 billion).

“Today’s announcement represents a major strategic milestone for our Group,” said adidas-Salomon Chairman and CEO Herbert Hainer. “This is a once-in-a-lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry.

adidas-Salomon and Reebok are energetic and growing companies with a shared commitment to innovation, sport performance and sport lifestyle. Together, we will expand our geographic reach, particularly in North America, and create a footwear, apparel and hardware offering that addresses a broader spectrum of consumers and demographics.

Videotrailer with Herbert Hainer, CEO adidas-Salomon AG

With Reebok, we are advancing our position on the playing field of the sporting goods industry and are improving our financial strength to drive increased shareholder value.”

“We have long respected Paul Fireman and his team for what they have accomplished at Reebok, and we expect them to be an important part of our Group as we bring these two world class organizations together,” Herbert Hainer continued. “We are pleased to welcome them to the adidas family. Their experiences and insights will play a central role in the continued development of the new Group both in North America and internationally.”

“adidas is the perfect partner for Reebok,” said Paul Fireman, Reebok Chairman and CEO. “With adidas, we are able to offer an enhanced portfolio of global brands that truly addresses the needs of today’s and tomorrow’s consumers. As an aspirational global sports performance and lifestyle brand, Reebok’s mission is to enroll global youth through sports, music and technology. This complements adidas’s mission to be the leading sports brand in the world with a focus on performance and international presence.

This transaction provides our shareholders with good value for their shares and our employees with an opportunity for an even more exciting future. I am thrilled by the opportunity to work with Herbert Hainer and the adidas team in our endeavour to take both brands to the next level.”

Strategic and Financial Benefits of the Transaction

adidas believes that the complementary nature of the two businesses in various geographies, products and consumer segments provides a significant opportunity for increased value creation. The combination will enable the Group to generate substantial cost savings as well as incremental revenue and profits from more complete coverage of all consumer segments. Given the solid management teams at both companies, adidas expects to realize the benefits of this transaction quickly and efficiently following the transaction’s close.

Strategic

• Extended geographic reach and more balanced sales profile. Reebok complements adidas’s international profile and enhances adidas’s strong position in North America.

North America represents approximately 50% of the global sporting goods market, and with Reebok, the adidas Group’s North American sales will more than double to €3.1 billion (U.S. $3.9 billion). In Europe and Asia, adidas enjoys stronger brand recognition, and has significant marketing expertise and insights.

adidas expects to use this expertise to further develop Reebok’s global presence.

• World-class and talented employees. Both adidas-Salomon and Reebok bring an exceptional team of talented and experienced employees to the new group. As a result of this transaction, Group employees will have even more exciting job opportunities.

Broader portfolio of world-renowned brands. The combined entity will have a more complete portfolio of brands that caters to a global consumer base. The portfolio will be anchored by two brands with well-defined identities – adidas, a leader in sports performance with a European heritage, and Reebok, an American leader in sports and lifestyle products. With its broad portfolio of brands, including adidas, Reebok, TaylorMade, Rockport, Greg Norman Collection, MAXFLI, CCM, Kofa and Koho, the adidas Group will be able to offer footwear, apparel and hardware products based on cutting-edge technology, trend-setting street wear and classic design.

• A more complete product offering in key sports categories. The new adidas Group will have a stronger presence in American sports and a complete product offering that addresses key sports categories, including soccer, basketball, running, American football, hockey, tennis, training, outdoor and golf.

• Stronger presence across teams, athletes, events and leagues. adidas expects that the combined Group’s strong presence across teams, athletes, events and leagues will enable it to substantially increase the worldwide visibility of its brands. The Group’s endorsement contracts will include many of the world’s elite teams, such as Real Madrid, Milan AC, Bayern Munich and Liverpool FC, and athletes, such as David Beckham, Tracy McGrady, Yao Ming and Allen Iverson, as well as high-profile global events, such as the 2006 FIFA World CupTM and the Beijing 2008 Olympics. The Group will also have licensing relationships with the UEFA Champions LeagueTM, more than twenty National Olympic Committees and five premier sporting leagues – the NFL, NBA, NHL, MLB and MLS.

• Enhanced R&D capabilities and cutting-edge technology. adidas is an award winning technology leader in the industry with the adidas innovation team having developed cutting-edge technologies, such as adidas_1, the first “intelligent running shoe,” ClimaCool TM and a3®.

Reebok also has a very talented group of experienced research and development professionals who have developed a distinguished portfolio of breakthrough product innovations, including the Pump 2.0 and DMX.

By harnessing both companies’ R&D expertise, the new adidas Group expects to accelerate new product introductions in footwear, apparel and hardware to help drive increased brand awareness and consumer demand across all brands.

About adidas-Salomon AG

Based in Herzogenaurach, Germany, adidas-Salomon is the second largest sporting goods company in the world with its core brands adidas and TaylorMade–adidas Golf.

Excluding the Salomon business segment, which is planned for divestiture at the end of September, the adidas Group had 14,217 employees and reached sales of €5.9 billion in 2004. The Group’s net income attributable to shareholders from continuing and discontinued operations reached €314 million in 2004.

About Reebok International Ltd.

Reebok International Ltd. (NYSE: RBK), headquartered in Canton, MA, is a leading worldwide designer, marketer and distributor of sports, fitness and casual footwear, apparel and equipment under the Reebok, Rockport, CCM, Jofa, Koho and Greg Norman brands. Sales for 2004 totaled approximately $3.8 billion. Reebok can be accessed on the World Wide Web at www.reebok.com

authority: Adidas & Newsmarket

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