CORAOPOLIS, Pennsylvania: Dick's Sporting Goods is set to acquire Foot Locker in a US$2.4 billion deal, marking the second major footwear buyout this month as retailers grapple with softening demand and escalating trade tensions.

The acquisition, announced this week, offers $24 per share – an 86 percent premium to Foot Locker's last closing price – and positions Dick's to expand its footprint in the sneaker market with over 3,200 stores and entry into international markets.

The deal comes amid a challenging retail environment, with U.S. President Donald Trump's tariffs pushing up supply-chain costs and potentially dampening consumer spending. "Tariffs may be forcing (the companies') hand to some extent, but this is also a strategic moment to acquire additional scale and strengthen buying power in the footwear market," said Joel Brock, a partner at consulting firm West Monroe.

Foot Locker shares soared 85 percent to $23.81 on the news, while Dick's stock dropped 14 percent. TD Cowen analyst John Kernan criticized the acquisition as a "strategic mistake," citing Foot Locker's recent struggles with declining mall traffic and market share losses to competitors.

Foot Locker, which operates in 20 countries and reported $8 billion in sales last year, has faced challenges as its key vendor, Nike, pivoted to a direct-to-consumer strategy under former CEO John Donahoe.

However, Nike has since reversed course under new CEO Elliott Hill, leaning back into retail partnerships – a move that could benefit Foot Locker under Dick's ownership.

Despite the challenges, Dick's plans to maintain Foot Locker as a standalone unit while leveraging its expanded scale to negotiate more favorable terms with brands like Nike, Adidas, and Puma. The acquisition is expected to close in the second half of 2025, funded by a combination of cash and new debt.