Dick’s Sporting Goods to Acquire Foot Locker for $2.4 Billion Amid Struggles

Dick’s Sporting Goods is set to acquire the struggling footwear company Foot Locker for approximately $2.4 billion. This marks the second major footwear company acquisition in recent weeks, as industry leaders grapple with the uncertainty surrounding U.S. President Donald Trump’s tariffs, which may affect companies that rely heavily on overseas manufacturing.

Dick’s announced on Thursday that they intend to operate Foot Locker as an independent unit, retaining the various Foot Locker brands, including Kids Foot Locker, Champs Sports, WSS, and the Japanese sneaker brand atmos.

“The worlds of sports and sports culture remain immensely influential, and this acquisition allows us to establish a new global platform to meet these evolving demands through well-known concepts consumers are familiar with, improved store designs, and integrated shopping experiences, alongside a product selection that caters to our diverse customer base,” stated Dick’s CEO Lauren Hobart in a press release.

Skechers announced that it was being taken private earlier this month by the investment firm by 3G Capital in a transaction worth more than $9 billion.

Foot Locker shareholders can choose to receive either $24 in cash or 0.1168 shares of Dick’s common stock for each Foot Locker share that they own.

The footwear industry has been growing increasingly concerned over Trump’s trade war with other countries, particularly China. Athletic shoe makers have invested heavily in production in Asia.

Shares of sporting goods and athletic shoe companies have been under pressure all year.

About 97% of the clothes and shoes purchased in the U.S. are imported, predominantly from Asia, according to the American Apparel & Footwear Association. Using factories overseas has kept labor costs down for U.S. companies, but neither they nor their overseas suppliers are likely to absorb price increases due to new tariffs.

Foot Locker offers Dick’s a lot of potential, namely its huge real estate footprint, and would give the Pittsburgh company its first foothold overseas.

Foot Locker has about 2,400 retail stores across 20 countries in North America, Europe, Asia, Australia and New Zealand. It also has a licensed store presence in Europe, the Middle East and Asia. The company had global sales of $8 billion last year.

Dick’s said that it anticipates closing on the Foot Locker deal in the second half of the year. The transaction still needs approval from Foot Locker shareholders.

Dick’s stock dropped more than 13% before the market open, while shares of Foot Locker surged more than 82%.