Mergers &
Acquisitions

The athletic retail landscape is shifting as Dick’s Sporting Goods makes a bold $2.4 billion move to acquire Foot Locker. Aiming to expand its global footprint and capture a broader customer base, Dick’s is betting on scale—even as investors question the risks tied to valuation, debt financing, and shifting consumer trends.

1. Dick’s Sporting Goods acquires Foot Locker for ~$2.4 billion

Dick’s Sporting Goods (NYSE: DKS) has agreed to buy the struggling shoe chain Foot Locker (NYSE: FL) with their goals to expand their presence globally and penetrate a new consumer base. Dick’s will acquire Foot Locker for $2.4 billion, using a mix of cash but also new debt, with shareholders having the choice of receiving either $24 in cash (66% premium of Foot Lockers average share price over the past 60 days) or 0.1168 shares of Dick’s stock.

The acquisition will allow Dick’s to grow its footprint in the footwear space, with Foot Locker’s ~2,400 stores across 26 countries as of 2024. Following the announcement, however, Dick’s stock was down 14% as of May 15th, while Foot Locker shares skyrocketed 85%, both company’s largest percent decreases or increases respectively. TD Cowen analyst John Kernan states that even though the deal may contribute to earnings per share, it poses a risk to Dick’s, and prefers management to focus on their growth initiatives which pose less risk.

With Dick’s buying Foot Locker at $24/share, almost a 90% premium from Foot Locker’s stock price at Wednesday’s closing bell, along with Foot Locker’s impact from the tariffs on China, investors remain doubtful. Favorable investors believe that the cost synergies from the deal will cover some of their margins and potential risks, and believe there is great financial potential.

Acquirer: Dick's Sporting Goods (Coraopolis, Pennsylvania)
Target: Foot Locker (New York, New York)
Deal Value: ~$2,400,000,000 (Cash + Debt)
Announcement Date: May 15^th, 2025
Acquirer Advisors: Goldman Sachs (Financial) + Wachtell, Lipton, Rosen, & Katz (Legal)
Target Advisors: Evercore (Financial) + Skadden, Arps, Slate, Meagher, & Flom LLP (Legal)

Summary

• Dick’s Sporting Goods is acquiring Foot Locker for $2.4 billion in cash and debt to expand its global footprint and deepen its presence in footwear.
• The deal offers shareholders a 66% premium and access to 2,400 stores worldwide.
• While the stock market reacted with volatility, long-term synergies and market reach could reshape the athletic retail landscape.

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