The German multinational shoe manufacturer Reebok Store can be seen in Hong Kong.

Budrul Chukrut | LightRakete | Getty Images

Adidas announced on Thursday that it had struck a deal to sell ailing sneaker and sportswear brand Reebok to Authentic Brands Group for up to 2.1 billion euros, or about 2.5 billion US dollars.

With the sale, Reebok becomes part of a retail group that has acquired many bankrupt brands such as Brooks Brothers, Aeropostale and Forever 21. Authentic Brands is preparing for an IPO that could take place this summer.

The acquisition of Reebok is expected to be completed in the first quarter of 2022, Adidas said in a press release. Adidas said the majority of the purchase price will be paid in cash upon closing of the deal. The remainder consists of deferred or contingent consideration, but the terms of this agreement were not disclosed. Adidas said it will share the majority of the sale proceeds with its shareholders upon closing.

German sportswear company Adidas was looking for a way to spin off or sell Reebok. It bought the Boston-based company for $ 3.8 billion in 2006 to expand its business and better hold off sneaker giant Nike. But Reebok lagged behind in the growth of Adidas’ own core business, creating pressure from investors to drop the lagging brand.

It previously sold some of the Reebok lines Rockport, CCM Hockey and Greg Norman.

Jamie Salter, CEO of Authentic Brands, said in a press release that the retail group will partner with Reebok to strengthen its business and maintain its brick and mortar stores.