Foot Locker stock surges 83% after acquisition news from Dick's Sporting Goods
Foot Locker stock surges 83% after acquisition news from Dick's Sporting Goods
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Dick's Sporting Goods set to acquire Foot Locker, aiming for sports retail dominance
As President Trump adjusts tariffs, Dick's aims to leverage Foot Locker's market presence to serve a wider global audience in sports retail.
Scripps News
Dick's Sporting Goods (NYSE: DKS) has agreed to acquire Foot Locker (NYSE: FL) for $2.5 billion, which is a substantial premium to the target's current trading price.
Foot Locker shares are jumping as a result, up 83% as of 10:15 a.m. ET, while Dick's is down about 15%.
Two big names in sports shoes
Dick's and Foot Locker are two of the largest athletic footwear retailers. Both stocks have been hit hard by tariffs and trade wars, with Dick's shares down about 20% year to date and Foot Locker shares cut in half so far in 2025 prior to this announcement.
Terms of the deal call for Foot Locker holders to receive either $24 in cash or 0.1168 shares of Dick's common stock in exchange for each share held. The cash offer represents a 66% premium to Foot Locker's 60-trading day volume weighted average price.
Read more: Dick's Sporting Goods laces up deal, acquires Foot Locker for $2.4B
Dick's officials said the combination will create a global platform and broaden its exposure to shoe enthusiasts.
"We have long admired the cultural significance and brand equity that Foot Locker and its dedicated Stripers have built within the communities they serve," Dick's chairman Ed Stack said in a statement. "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."
Dick's or Foot Locker: What stock should you buy?
The deal is expected to close before year-end, and given the premium, Foot Locker investors should not anticipate a bidding war. It is likely that Foot Locker's race is run, and investors should decide whether to hold on and take the Dick's shares or cash out and look elsewhere.
Dick's has been a top operator for years, and the company expects this deal to contribute to earnings in the first full year following its close. Acquisitions create risk, and investors are understandably skittish given the operating environment, but if management can get this integration right there is a lot of opportunity for the company up ahead.
For long-term focused investors, Dick's shares are worthy of consideration.
Lou Whiteman has positions in Foot Locker. The Motley Fool recommends Foot Locker. The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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