Adidas yesterday agreed to buy Reebok for €3.1 billion in a deal which will transform the sporting goods industry by pitting the German company against market leader Nike.

Analysts said the acquisition, which is subject to approval from anti-trust authorities, would leave Nike and Adidas-Reebok with control of about 60 per cent of the global market.

"There is now effectively a duopoly in the industry," said Deborah Aitken, analyst at WestLB.

Herbert Hainer, Adidas's chief executive, said the deal was a "perfect fit" as Reebok's strength in the US and American sports - where the German company has been weak - complemented their strongholds in European and Asian markets.

"The big difference between Nike and Adidas has been in the US and this is a strategic step to close that gap," he said.

Some analysts expressed scepticism, pointing to the relative failure of Adidas's 1997 purchase of Salomon, the winter sports business that it sold on in May.

Adidas and Reebok will have 25 per cent of the global footwear market against 33 per cent at Nike. Combined revenues at Adidas and Reebok, adjusted for the Salomon disposal, would have been €8.9 billion last year, compared to €10 billion at Nike.

Mr Hainer said he was confident that the deal would close in the first half of next year and would experience no serious regulatory issues. However, some analysts said that the deal was a sign of desperation because Adidas's underlying business, which reported strong first-half profits yesterday, had failed to compete with Nike as a stand-alone company.

"For Adidas shareholders, we think that this is a tough nut to swallow and speaks to the difficulties it has had competing with Nike and its global brand strength," wrote Margaret Mager at Goldman Sachs.

Mr Hainer deflected such criticism and said the deal strengthened Adidas in areas it knows best, unlike the diversification brought on by Salomon. "This is our core business where we know inside out all the details and what to do." - (Financial Times Service)