Converse has been making basketball shoes since the 1920s, but filed for bankruptcy in 2001. The deal will see Nike take on certain, unspecified liabilities of Converse, as well as taking control of 100% shares in the company.
Tom Clarke, president of new-business ventures at Nike, said: "Converse is one of the strongest footwear brands in the world with great heritage and a long history of success."
Converse has suffered in recent years as people turned away from Converse's low-tech designs to shoes with features such as inflatable tongues, shock-absorbing soles and technical fabrics, although the company has been introducing modern basketball designs more recently.
Converse is most famous for its Converse All-Star shoe, which in comparison with modern trainers is a simple classic design with its rubber toe.
Jack Boys, chief executive officer of Converse, said: "Over the past two years, we have rebuilt and reinvigorated the Converse brand to its long-standing position as America's original sports company, but our job is not done."
He added: "Our partnership with Nike creates significant opportunity for us to execute our vision for building a leading global sports footwear and apparel brand by growing our core business and expanding our product offerings into other sports performance and lifestyle categories."
Retro is very now, with rival shoe maker Reebok recreating some of its earlier models in an attempt to cash in on the fad for all things 1980s, and Converse has benefited from this revival, with global sales of $205m (拢125.6m) last year -- still small fry when compared with Nike's $9.5bn global sales.
Nike's Clarke said: "Our strategy for growing through non-Nike brands is to identify strong brands with superior management teams where Nike can directly assist in the company's growth. Converse certainly meets our criteria and its brand equity offers potential to drive even greater revenue and earnings performance. We believe the addition of Converse to our increasingly diverse Nike Inc portfolio will contribute to creating long-term shareholder value."
Earlier this week, Nike warned that it might have to curtail its PR activities after a case it had brought to the supreme court in the US was dismissed.
The case stems back to a lawsuit filed in 1998 by an activist, Mark Kasky, who claimed that Nike had issued misleading statements on its labour practices, but has turned into a debate about whether or not press releases are covered by the first amendment of the US constitution, which guarantees freedom of speech. Advertising is not covered by the first amendment.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .