Germany-based sports apparel brand adidas has closed the previously announced divestiture of its Reebok business to Authentic Brands Group (ABG) for a total consideration of up to €2.1bn ($2.3bn).

In keeping with the definitive agreement signed in August last year, Adidas has received the majority of the deal value in cash.

During the transition period, the company will continue to operate the business in several markets on behalf of ABG.

ABG will transfer Reebok to its operating partners through a series of deferred local closings, which are scheduled to take place later this year and early next year.

Adidas will use the proceeds from the sale to launch a share-buyback programme, through which it will repurchase its own shares worth up to €1.5bn ($1.68bn) to return to shareholders from this month.

The programme will run concurrently to the company’s regular buyback activities.

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By GlobalData

In December last year, Adidas launched a multi-year share buyback programme, under which it plans to buy back up to €4bn worth of its shares until 2025.

The company completed the first tranche of this programme on 22 February.

Adidas chief financial officer Harm Ohlmeyer said: “We thank Reebok and the employees who transfer to ABG and its operating partners as a result of today’s closing and acknowledge their contribution to the company over the years and during the transition period.

“The completion of the divestiture of Reebok is another important milestone in the execution of our strategy ‘Own the Game’.

“As previously announced, we are returning the cash proceeds from the divestiture to our shareholders.

“This will be done via another share buyback programme and reflects our confident outlook on 2022, despite the various challenges we are currently confronted with.”

The sale comes after ABG recently partnered with former England footballer David Beckham to co-own and manage the David Beckham global brand.