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adidas Acquires Reebok

August 4, 2005 – adidas-Salomon AG (DAX:ADSG.DE) and Reebok International Ltd. (NYSE:RBK) yesterday 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. 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.

Management and Headquarters

The structure of the combined Group has been agreed to secure a rapid delivery of the strategic and financial benefits created by the transaction. adidas will maintain its corporate headquarters in Herzogenaurach and its North American adidas headquarters in Portland, Oregon. Mr. Fireman will remain as Chief Executive Officer of Reebok International Ltd. and will continue to lead the Reebok team. Reebok will continue to operate under its name and will retain its headquarters in Canton, Massachusetts. This transaction is about growing the combined entity, and adidas-Salomon does not anticipate significant workforce reductions.

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