Dick's Sporting Goods Buys Foot Locker For $2.4 Billion
Dick's Sporting Goods (DKS) has agreed to buy rival Foot Locker (FL) for $2.4 billion U.S.
Dick’s, which is one of the biggest sporting goods retailers in the U.S., has offered $24 U.S. per share for Foot Locker, an 86% premium to the stock's last closing price.
Foot Locker has struggled since the Covid-19 pandemic shutdown its stores or forced them to operate at reduced capacity.
Prior to news of the acquisition, Foot Locker’s stock had lost about 40% of its value this year and was down nearly 50% over the past five years.
Dick’s Sporting Goods’ purchase of Foot Locker comes amid a wave of consolidation in the
footwear sector.
Private equity firm 3G recently announced a $9.42 billion U.S. buyout of sneaker maker Skechers (SKX).
Analysts say companies are consolidating as the businesses attempt to navigate the uncertainties caused by U.S. President Donald Trump’s trade policies.
Shoemakers are particularly vulnerable to President Trump’s import tariffs as most of their products are manufactured abroad in countries such as Vietnam and China.
Shares of Foot Locker are up 82% to $23.39 U.S. on news that the company is being acquired.
The stock of Dick's Sporting Goods is down 13% on news of the deal, which is subject to regulatory approvals. The stock looks set to begin trading on May 15 at $182 U.S. per share.
