Dick’s Sporting Goods to Acquire Foot Locker in $2.4 Billion Deal
In a major move to expand its global reach and attract new customers, Dick’s Sporting Goods has announced its plans to acquire Foot Locker Inc. for a whopping $2.4 billion USD. The deal, which has been confirmed by both companies, will see Dick’s utilizing a combination of cash and new debt to acquire Foot Locker.
According to The Wall Street Journal, the acquisition is part of Dick’s strategy to enhance its e-commerce infrastructure and invest further in physical retail locations. The brand currently operates around 800 stores in the United States, while Foot Locker boasts a strong chain of 2,400 stores. However, despite its smaller store count, Dick’s brings in almost double the revenue of Foot Locker, with $13.44 billion USD in sales compared to Foot Locker’s $7.99 billion USD in the last fiscal year.
Under the terms of the agreement, Foot Locker shareholders will have the option to receive either $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, as reported by CNBC.
In a conference call, Dick’s CEO Lauren Hobart assured that the two companies will continue to operate separately, stating, “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.”
Foot Locker CEO Mary Dillon also expressed her excitement about the acquisition, stating, “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.” She added that she is confident the deal is in the best interest of shareholders and stakeholders.
