Summary
- Dick’s Sporting Goods is set to acquire Foot Locker.
- The deal is valued at $2.4 billion USD.
Dick’s Sporting Goods has agreed to purchase Foot Locker Inc. in a deal worth roughly $2.4 billion USD, as the company aims to expand its international presence and attract new customers, according to The Wall Street Journal.
Under the agreement, Dick’s will utilize both cash-on-hand and new debt to acquire Foot Locker, and shareholders can either take $24 USD in cash (a 66% premium based on Foot Locker’s average share price from the last 60 days) or 0.1168 shares of Dick’s stock, per CNBC.
In the last two quarters, Dick’s revenue growth has decline, as chief executive office Lauren Hobart looks to enhance the company’s e-commerce infrastructure and invest further into physical retail outposts. The brand operates approximately 800 stores across the United States, while Foot Locker has a strong chain of 2,400 stores. Still, Dick’s is almost double the size of Foot Locker in revenue: In the last fiscal year, Dick’s reported $13.44 billion USD in sales, while Foot Locker recorded $7.99 billion USD.
In a conference call, Hobart confirmed that the companies will continue to run separately. “The combination of them for the consumer is not the most important thing; it’s making sure that there are two powerful brands that meet all consumer needs, wherever, whenever, and however they want to shop,” she said.
“By joining forces with DICK’S, Foot Locker will be even better positioned to expand sneaker culture, elevate the omnichannel experience for our customers and brand partners, and enhance our position in the industry,” said Foot Locker CEO Mary Dillon, adding that she is “confident this transaction represents the best path for our shareholders and other stakeholders.”.
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