Dick’s Sporting Goods is buying Foot Locker: Here’s everything to know about the $2.4 billion deal

On Thursday morning, Pittsburgh-based Dick’s Sporting Goods announced its plans to acquire footwear and apparel retailer Foot Locker. The two companies have entered into a merger agreement, where Dick’s Sporting Goods will buy Foot Locker for $2.4 billion. Here’s what to know about the deal.

How will the deal work?

Dick’s will finance the merger using a combination of cash-on-hand and new debt. As part of the agreement, Dick’s will acquire Foot Locker’s vast portfolio of brands, including Foot Locker, Kids Foot Locker, Champs Sports, and WSS.

Foot Locker currently operates over 2,000 retail stores across the globe. Dick’s will operate Foot Locker as a standalone business within its portfolio. 

How have the companies’ stock prices reacted to the news?

Dick’s Sporting Goods shares (NYSE: DKS) were down more than 13% in early-morning trading on Thursday. By contrast, Foot Locker stock (NYSE: FL) jumped more than 82%.

In a joint press release, leaders from both companies shared optimism for the planned merger. 

Dick’s CEO Lauren Hobart said, “We look forward to welcoming Foot Locker’s talented team and building upon their expertise and passion for their business.”

Hobart continued, “Sports and sports culture continue to be incredibly powerful, and with this acquisition, we’ll create a new global platform that serves those ever evolving needs through iconic concepts consumers know and love.” 

Foot Locker CEO Mary Dillon said, “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.”

Tariff pain and broader economic uncertainty

The news comes as retailers brace for uncertainty due to President The President’s tariffs on foreign goods. The vast majority of footwear sold in the U.S. is imported from other countries.

Earlier this week, the United States and China reached a trade-war truce. Both countries will temporarily reduce tariff rates for 90 days. However, there is still uncertainty among U.S. retailers due to The President’s erratic and ever-changing trade policies. 

The merger agreement was unanimously approved by the boards of directors of Dick’s and Foot Locker. As part of the agreement, Foot Locker investors can elect to receive $24 in cash or 0.1168 shares of Dick’s stock.

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