British Company Wants to Increase Adidas Stake to 95%

Britain’s Pentland Group agreed Tuesday to pay more than $400 million to acquire a 95% stake in Adidas in a deal that will make it Europe’s biggest sportswear company.

The British company plans to buy the holding from the crumbling sports business empire of French entrepreneur and Socialist politician Bernard Tapie.

Pentland said it will pay $409.7 million for the remaining 79.95% stake in Bernard Tapie Finance of Germany, whose sole asset is the stake in Adidas. It will acquire the stake from French-based Bernard Tapie Finance.

“We have expertise in distribution and Far East sourcing which will allow us to raise profitability at Adidas,” Pentland Finance Director Frank Farrant said. “This is a major acquisition for us.”

The British company said the deal is conditional, pending a review of Adidas’ books, approval by its shareholders and completion of a financing agreement.

Pentland got its foot in the door at Adidas when it bought a 20.05% stake in Bernard Tapie Finance, a German holding company controlled by Tapie.

The company paid $88.75 million in August, 1991, for the stake and also obtained the right of first refusal to acquire Tapie’s 55% stake in the holding company.

Pentland made $777 million by selling shares in U.S. sportswear group Reebok International from an initial $77,500 investment when Reebok was still an upstart firm in 1981.