04 » Sale of the Reebok Business
The divestiture of the Reebok business was completed on February 28, 2022, with effect from March 1, 2022. The total purchase price amounted to € 1,686 million consisting of € 1,165 million immediate payment, earn-out components in an amount of € 247 million, and deferred consideration in an amount of € 274 million. The assets and liabilities, which were reported as assets/liabilities held for sale since February 2021, due to the concrete plans to sell the business, were consequently derecognized from the consolidated statement of financial position as at February 28, 2022.
€ in millions |
|
February 28, 2022 |
|---|---|---|
|
|
|
Consideration received or receivable: |
|
|
Cash |
|
1,165 |
Fair value of contingent and deferred consideration |
|
521 |
Total disposal consideration |
|
1,686 |
Carrying amount of net assets sold |
|
(1,392) |
Gain on sale before income tax and reclassification of foreign currency translation reserve |
|
294 |
Reclassification of foreign currency translation reserve |
|
228 |
Gain on sale before income tax |
|
522 |
Income tax expense on gain |
|
(343) |
Gain on sale after income tax |
|
179 |
An additional payment of up to € 500 million will be due in case the Reebok business meet certain performance criteria during the period from March 1, 2022 to December 31, 2031. At the time of the sale, the fair value of the consideration was determined to be € 247 million. It has been recognized as a financial asset at fair value through profit or loss.
At the end of the fiscal year 2022, the fair value was re-estimated to be € 227 million. The loss of € 20 million is presented in discontinued operations net of related income tax.
Additionally, as contemplated in the sale agreement relating to the Reebok business, the purchase is subject to deferred considerations for inventory and contractually specified items, which amount to € 274 million.
The carrying amounts of assets and liabilities as at the date of sale were:
€ in millions |
|
February 28, 2022 |
|---|---|---|
Cash and cash equivalents |
|
1 |
Accounts receivable |
|
97 |
Inventories |
|
298 |
Other current financial assets |
|
2 |
Other current assets |
|
4 |
Total current assets |
|
403 |
Property, plant, and equipment |
|
62 |
Right-of-use assets |
|
125 |
Goodwill |
|
28 |
Trademark Reebok |
|
1,383 |
Other intangible assets |
|
0 |
Total non-current assets |
|
1,598 |
Total assets |
|
2,001 |
|
|
|
Accounts payable |
|
50 |
Current lease liabilities |
|
32 |
Other current provisions |
|
28 |
Current accrued liabilities |
|
73 |
Other current liabilities |
|
4 |
Total current liabilities |
|
187 |
Non-current lease liabilities |
|
111 |
Deferred tax liabilities |
|
308 |
Other non-current provisions |
|
3 |
Total non-current liabilities |
|
422 |
Total liabilities |
|
609 |
|
|
|
Net assets |
|
1,392 |
