Overview

• Dick's Sporting Goods has agreed to acquire Foot Locker for $24 per share, valuing the deal at $2.4 billion in equity and $2.5 billion in enterprise value.
• Foot Locker shareholders can choose between cash or stock consideration, with the offer representing an 86% premium over the prior day’s closing price.
• The acquisition aims to expand Dick's global presence, strengthen partnerships with brands like Nike, and tap into sneaker culture through Foot Locker's network.
• Analysts warn of risks tied to Foot Locker's reliance on Nike (60% of sales), its mall-based footprint, and a low operating margin of 2.5%.
• Foot Locker's stock surged over 80% following the announcement, while Dick's shares fell 15%, reflecting investor concerns over the financial and operational risks.