The Adidas - Reebok Merger

The new entity would continue to have separate headquarters and their individual sales forces. The companies would also keep most of the distribution centers independent and would have separate advertising programs for their brands. Hainer said, "The brands will be kept separate because each brand has a lot of value and it would be stupid to bring them together.

The companies would continue selling products under respective brand names and labels." Adidas declared that the deal would involve investment in both Adidas and Reebok. These investments would guide the companies towards effective consolidation.

Analysts had varied opinions about the deal. Some analysts felt that Adidas could beat Nike to become the industry leader. Al Ries said that, "The biggest benefit is that it removes a competitor. Now, all they need to do is to focus all their efforts on competing with Nike." However, a few analysts opined that it was impossible to dislodge Nike from its No. 1 position.

Nike was a preferred brand because of its fashion status, colors, and combinations. Although Adidas was perceived to have good quality products that offered comfort and Reebok was perceived as a 'cool' brand, Nike was perceived as having both 'hipness' and quality...