Dick's Sporting Goods to buy Foot Locker for $2.4bn

(Sharecast News) - US sports retailers Dick's Sporting Goods said on Thursday that it has agreed to buy Foot Locker for $2.4bn. Under the terms of transaction, Foot Locker shareholders will elect to receive either $24 per share in cash or 0.1168 shares of Dick's common stock for each of their shares.

The cash consideration represents a premium of about 66% to Foot Locker's 60-trading day volume weighted average price.

Lauren Hobart, president and chief executive of Dick's, said: "We look forward to welcoming Foot Locker's talented team and building upon their expertise and passion for their business, which we intend to honour and amplify together.

"Sports and sports culture continue to be incredibly powerful, and with this acquisition, we'll create a new global platform that serves those ever evolving needs through iconic concepts consumers know and love, enhanced store designs and omnichannel experiences, as well as a product mix that appeals to our different customer bases."

Mary Dillon, CEO of Foot Locker, said: "Today's announcement marks the start of an exciting new chapter for Foot Locker and is a testament to our team's hard work and dedication to our mission.

"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. We are pleased to provide shareholders with a transaction structure that offers the choice of significant and immediate cash value or the opportunity to invest in the combined company and benefit from the substantial upside potential."

At 1700 BST, Foot Locker shares were up 85% at $23.81. Dick's shares were 13.6% lower at $181.10.

Danni Hewson, head of financial analysis at AJ Bell, said: "The acquisition will give Dick's a toehold in international markets and presents them with a younger, more dynamic consumer and more muscle to do deals in the hugely competitive sporting goods market.

"That increased size could also be a real boon at a time when tariff uncertainty is pushing manufacturers to shift supply chains and hunt out new sales opportunities."