Dick's Sporting Goods To Acquire Foot Locker At 66% Premium

Foot Locker, Inc. FL shares rocketed premarket on Thursday after the company disclosed a definitive deal to be acquired by Dick’s Sporting Goods Inc DKS, which values Foot Locker’s equity at around $2.4 billion and its enterprise at about $2.5 billion.

DICK’S plans to fund the acquisition using a combination of its existing cash reserves and newly incurred debt.

As per the deal, Foot Locker shareholders will have the option to receive either $24.00 in cash or 0.1168 shares of DICK’S common stock for each share of Foot Locker common stock they own.

Also Read: Foot Locker Stock Soars On Potential Dick’s Sporting Goods Deal: Report

Based on Foot Locker’s closing stock price on May 14, 2025, the $24.00 per-share consideration reflects a premium of about 66% over Foot Locker’s 60-trading-day volume-weighted average price.

The transaction is expected to close in the second half of 2025, upon shareholder approval and other customary closing conditions.

Synergy & Benefits: DICK’S anticipates that this acquisition to increase its EPS starting in the first full fiscal year after the deal closes, excluding transaction and other one-time costs related to achieving synergies.

The company also expects to realize between $100 million and $125 million in cost synergies in the medium term through efficiencies in procurement and direct sourcing.

Ed Stack, Executive Chairman of DICK’S said, “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.”

Mary Dillon, CEO of Foot Locker added, “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.”

DKS Q1 Preliminary: The company sees comparable sales growth of 4.5% and adjusted EPS of $3.37 vs. the consensus of $3.22. The company will report first-quarter results on May 28, 2025.

FL Q1 Preliminary: The company expects a comparable sales decline of 2.6% year over year (Y/Y), with comparable sales in the North America region decreasing by 0.5%.

Foot Locker projects adjusted loss per share of 7 cents in the first quarter (consensus of $0.41), vs. EPS of 22 cents in the corresponding prior-year period.

Adjusted loss per share excludes non-cash impairment charges totaling $276 million and reflects a $140 million charge related to a tradename and a goodwill impairment charge of $110 million.

Also, the company recorded a full valuation allowance on deferred tax assets and deferred tax costs related to the European business totaling $124 million.

Foot Locker will report results on May 29, 2025.

As of February 1, 2025, DICK’S cash and cash equivalents stood at $1.69 billion.

Price Action: FL shares are up 83.30% at $23.59, while DKS stock dipped 11.70% at $185.10 premarket at the last check on Thursday.

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Photo by C. Nass via Shutterstock