Reebok Gets Big Bounce

Adidas confirms its $3.8 billion cash takeover.
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Updated from Aug. 2

Shares of

Reebok

(RBK)

soared Wednesday after

Adidas

confirmed it is buying the U.S. sneaker and sportswear company for $3.8 billion.

Adidas-Salomon, based in Germany, offered $59 a share for Reebok, sending its stock up 30% to $56.99 in morning trading.

The combined Adidas/Reebok will control about 20% of the U.S. sports market, swelling its scale in an attempt to create more formidable competitor to the No. 1 brand,

Nike

(NKE) - Get Report

.

"The new group will benefit from a more competitive platform worldwide, well-defined and complementary brand identities, a wider range of products, and an even stronger presence across teams, athletes, events and leagues," the companies said. Combined, the company would have had pro forma revenue of $11.1 billion last year.

Adidas expects the acquisition to be accretive to earnings in the first year after closing and generate annual cost savings of $150 million in its third year.

Nike rose $1.81, or 2.1%, to $87.64 Wednesday.