Dick’s Sporting Goods is reportedly set to acquire Foot Locker for $2.4 billion.
This acquisition, which is expected to close as early as Thursday, includes multiple other brands under Foot Locker, including Kids Foot Locker, Champs Sports, WSS, and atmos, according to a news release from Foot Locker.
The plan has been unanimously approved by the boards of directors of Dick’s and Foot Locker. It results in Dick’s purchasing the company for roughly $24 per share, which is significantly higher than the $12.87 it closed at on Wednesday.
Foot Locker highlighted a variety of benefits from the sale between the two companies, including an ability to “Create a global platform within the growing sports retail industry,” “Serve a broader set of consumers across differentiated concepts,” and “Invest in future growth through an industry-leading omnichannel experience.”
Although Dick’s has struggled this year, with shares down roughly 8%, the company hit all-time highs in January and still maintains a market share of $19 billion, according to The Wall Street Journal.
Similarly, Foot Locker’s shares have dropped by 40% this year, meaning this deal has the potential to help both companies improve their shares through boosted consumer belief.
Ed Stack, executive chairman of Dick’s, said in the Foot Locker news release that Dick’s has “long admired the cultural significance and brand equity that Foot Locker and its dedicated Stripers have built within the communities they serve.”
“We believe there is meaningful opportunity for growth ahead. By applying our operational expertise to this iconic business, we see a clear path to further unlocking growth and enhancing Foot Locker’s position in the industry. Together, we will leverage the complementary strengths of both organizations to better serve the broad and evolving needs of global sports retail consumers.”
Foot Locker CEO Mary Dillon expressed similar optimism about the company, saying this sale “marks the start of an exciting new chapter for Foot Locker,” adding that it is a “testament to our team’s hard work and dedication to our mission.”
“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. I am proud of all that our teams around the world, including our Stripers, have accomplished to reach this milestone moment, and am confident this transaction represents the best path for our shareholders and other stakeholders,” she wrote in the news release.
Investors have also seemingly bought into the belief shown by those within the companies, as the price of Foot Locker’s stock surged approximately 85% in after-hours trading following the announcement.