Foot Locker Acquires Dick's Sporting Goods; Regulatory Approvals Completed

Dick's-Foot Locker merger waiting period expires, all required regulatory approvals complete. Foot Locker is a retailer of shoes and apparel with 2,523 stores in 26 countries across North America, Europe, Australia, New Zealand, and Asia. Its portfolio includes Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos.

The long-awaited merger between Dick's Sporting Goods and Foot Locker has cleared its final hurdles. Regulatory approvals have been completed, and the merger is now set to close in the second half of the year, as reported by Retail Dive [1].

The merger, valued at $2.4 billion, was approved by 99% of Foot Locker's shareholders in May. Despite the overwhelming shareholder support, the deal faced opposition from U.S. Sen. Elizabeth Warren, who requested the Federal Trade Commission to scrutinize the transaction [1].

The combined entity will have a significant presence in the retail athletic footwear market, with Foot Locker's 2,400 stores and Dick's Sporting Goods' 800 stores. The merger aims to create a $21 billion business, leveraging the combined strengths of both companies. Foot Locker will continue to operate as a stand-alone business, but the merger will provide benefits such as a stronger bargaining position with vendors, access to customer bases, and combined resources [1].

The merger is expected to enhance Foot Locker's turnaround plans, which include shuttering and revamping stores to address sales declines and a tough consumer environment. The deal also means Dick's Sporting Goods will acquire a retailer with a heavy dependence on one brand (Nike) and a weak operating margin of 2.5% in 2024, which could potentially dilute Dick's 11.0% operating margin [1].

Foot Locker shareholders will receive $24 in cash or 0.1168 shares of Dick's common stock for each share of Foot Locker stock they own. The merger is a significant step forward for both companies, positioning them to expand sneaker culture and elevate the omnichannel experience for customers and brand partners [1].

References:
[1] https://www.retaildive.com/news/foot-locker-shareholders-approve-dicks-sporting-goods-acquisition-deal/758502/