Adidas To Sell Salomon

Sportswear giant Adidas has agreed to sell itds Salomon division to Finnish sports equipment firm Amer Sports Corp. for 485 million euros. The sale, to be completed by the end of September, includes the Salomon, Mavic, Bonfire, Arc'Teryx and Cliche businesses, which cater to sports such as snowboarding, cycling and hiking.

Adidas acquired the Annecy, France-based ski and sporting goods firm in 1997. At the time, then-president Robert Louis-Dreyfus touted the transaction as "a major step towards the establishment of the best portfolio of sports brands in the world." But Salomon ran up against a sluggish market for ski equipment and apparel, and high manufacturing costs hampered profitability. Last December, Salomon said it would cut about 160 jobs in France as it shifted production to cheaper Romania and China.

Investors, who have long been calling for Adidas-Salomon to shed the troublesome unit, cheered Monday's news, sending shares in Adidas-Salomon up 7.7 percent to close at 129.30 euros on the Frankfurt stock exchange. The Salomon division saw first-quarter sales decline 9 percent to 112 million euros, or $146.9 million at average exchange rates, from 122 million euros, or $160.1 million, a year ago. Adidas blamed the drop in part on lower sales of inline skates, cycling components, and a general fall in the winter sports category.