Adidas Agrees to Sell Reebok to Authentic Brands
Topic of the day
Adidas AG said it has agreed to sell Reebok to Authentic Brands Group for up to about $2.5 billion, roughly 15 years after acquiring the U.S. fitness brand and trying to revamp it. The German sporting-goods company managed to improve the Reebok business, but its sales lagged behind those of Adidas itself and dragged down the group’s profits. Adidas, which in December 2020 said it was exploring a Reebok sale, acquired the brand in 2006 for roughly 3 billion euros as part of a bid to expand in the U.S. The company put the value of the deal with Authentic Brands at as high as €2.1 billion. Over the past few years, brand-management company Authentic Brands has made a name for itself by picking up downtrodden retail brands including JCPenney and Forever 21. Adidas on Thursday said the majority of the transaction will be paid in cash at the deal’s closing, with the remainder made up of deferred and contingent fees. The company said it plans to share much of the cash proceeds with shareholders after the deal is expected to close in next year’s first quarter. Authentic Brands will keep Reebok’s bricks-and-mortar presence, said Jamie Salter, the company’s founder and chief executive.
The record chase on the Swiss stock market continued on Thursday. The SMI climbed to an all-time high of 12,444 points. The SMI improved by 0.3 per cent to 12,429 points. Among the 20 SMI stocks, there were 15 price gainers and five price losers. 22.80 (previously: 23.17) million shares were traded. Among the individual stocks, the results of Zurich Insurance (+3.8%) were in focus. According to Citigroup, the operating profit for the first half of the year was above forecasts. Solvency was in line with expectations and cash benefits of an expected USD 4 billion in the second half were in line with the company's target. The company's statements on the outlook are positive, but nothing new. Overall, the quarter is considered good. Analysts expect a further increase in margins. The Swisscom share showed a small plus. The European telecom sector was among the biggest winners on the reporting day. This was triggered by the good figures of Deutsche Telekom for the second quarter.
European equity markets ended higher on Thursday, with indices continuing to rise in the wake of news that US inflation is slowing. The Stoxx Europe 600 index gained 0.1 percent, setting a ninth consecutive record high at 474.8 points. In Paris, the CAC 40 and the SBF 120 gained 0.4% and 0.3% respectively. In Frankfurt, the DAX 30 gained 0.7%, while the FTSE 100 in London lost 0.4%. Eurozone industrial production declined again in June, missing expectations of an increase as supply-chain bottlenecks hindered activity, Eurostat data released Thursday showed. Output from factories, mines and utilities across the single-currency area in June fell 0.3% from the previous month, the EU statistics agency said. Economists polled by The Wall Street Journal had forecast a 0.2% increase. Hapag-Lloyd AG on Thursday said that its first-half profit increased as container demand was strong and freight rates were high. The German shipping operator posted a net profit of $3.28 billion in its first half up from $314 million during the same period last year. Revenue rose about 51% to $10.55 billion, it said. Aviva PLC reported on Thursday a swing to a net loss for the first half of 2021 and a rise in operating profit, and said that it is launching a share buyback program. The FTSE-100 insurer posted a net loss of 232 million pounds ($321.8 million) compared with a profit of GBP821 million for the same period a year earlier.
U.S. stocks rose Thursday ahead of a series of earnings reports later in the day and after fresh labor-market data provided insight on the pace of the recovery. The S&P 500 gained 13.13 points, or 0.3%, to 4460.83, its 47th record high of the year. The Nasdaq Composite edged up 51.13 points, or 0.35%, to close at 14816.26, while the Dow Jones Industrial Average rose 14.88 points, or less than 0.1%, to 35499.85 to a record close. New applications for jobless benefits declined for the third straight week, showing the labor market continues to heal despite worries about the Delta variant. First-time applications for benefits, a proxy for layoffs, fell to a seasonally adjusted 375,000 in the week ended Aug. 7, from a revised 387,000 in the prior week, the Labor Department said Thursday. In recent weeks, jobless claims have been hovering just above the lowest level touched since the pandemic took hold in the U.S. in March 2020. The company most often blamed for the opioid epidemic, OxyContin maker Purdue Pharma LP, sought refuge in bankruptcy from an onslaught of lawsuits that threatened to put the drugmaker out of business. Now, after nearly two years in chapter 11, Purdue heads to trial in a New York bankruptcy court to seek approval of a multibillion-dollar proposal to settle the nationwide litigation that hinges on a roughly $4.5 billion contribution from the company’s Sackler family owners. U.K. antitrust officials said they could call on Facebook Inc. to unwind its acquisition of Giphy, a provider of popular animated images, after provisionally finding that the deal would harm competition between social-media platforms and in the display advertising market.
Stock markets in East Asia and Australia are mixed on Friday. In Sydney, participants are encouraged by new records on Wall Street. Elsewhere, such as on the Chinese stock exchanges and especially in Seoul, the Corona pandemic is dampening the buying mood. In addition, Beijing has made a new regulatory push, namely against the real estate sector. As a result, the Hong Kong market recorded significant losses of 0.7 per cent. The Chinese government has prevented private equity funds from investing in residential property developers. In addition, technology stocks are among the sectors sold off: Alibaba Group loses 2.4 per cent, Tencent Holdings 2.1 per cent and Alibaba Health Information Technology 1.3 per cent.
U.S. treasury yields dipped in Asia after they ended higher on Thursday following a $27 billion auction of 30-year bonds and the release of U.S. producer price index data, which came in hotter than economists had expected. Inflation running hot, in theory, should push up yields for longer dated bonds because rising pricing pressures can erode government debts fixed value.
Independent Research rises Ahold-Delhaize target to 31 (29) EUR – Buy
UBS lowers Sanofi target to 100 (101) EUR – Buy
CS rises Brenntag target to 100 (95) EUR – Outperform
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