Adidas buys Reebok for lifestyle line

Adidas said Wednesday it will buy shoemaker Reebok for $3.8 billion, giving the company about 20 percent of the U.S. market. Adidas is very popular in Europe among soccer and athletics while Reebok is very popular among US basketball and football fans.

Adidas has also been losing market share in the US while Reebok has been gaining. Reebok’s urban lifestyle line which includes 50 Cent's G Unit and Jay Z's S Cart shoe lines has been the most profitable area for the company accounted for 51% of sales for the 12-month sales period ending in May.

The combined company will be in a better position to challenge Nike the number one sportswear and athletic gear company. "Adidas-Reebok will make inroads against Nike by presenting a stronger fashion brand, which will also gain wider support and endorsement deals," said Faith Hope Consolo of Prudential Douglas Elliman in an Associated Press article.

In a move to counter Reebok in the lifestyle market segment Nike is launching an upscale urban fashion line. The new line will be called Blue Ribbon Sports will only be sold at high-end retailers. Nike up until now has relied on technology to sell it’s wears will ignoring the fashion and lifestyle area.