JD Sports Acquire Rival Company for $1.1 Billion
are set to gain a stronger market hold in the Southeast and Midwest of the United States after brokering an agreement to acquire Hibbett Sports, who were previously their rival in the US market. ‘Today is a significant milestone for JD Sports as we take this transformative step as a global leader in the sports fashion industry through this transaction with Hibbett,’ said Régis Schultz, CEO of JD Sports.
JD have offered to purchase all outstanding shares of Hibbett stock at a premium price of $87.5 per share, which is 21 per cent more than what they were when the market closed on April 22. This prices the deal at a whopping $1.1 billion (a similar price to what for earlier this year by Authentic Brands Group). The Hibbett Board of Directors unanimously approved the agreement, but to make it official, approval still needs to come from Hibbett stockholders and regulators, which is expected to happen in the second half of this year. When the deal goes through, Hibbett will retain their brand identity, CEO, and headquarters in Alabama; however, they will operate under JD Sports and cease being a publicly traded company. This means the shareholders will be paid out their stocks at the previously mentioned premium price of $87.50 per share.
‘The transaction with JD Sports will create immediate, certain and substantial value for Hibbett stockholders while ensuring that our brands are well-positioned to continue to serve the customers and communities that have always been the central focus of Hibbett’s business,’ said Anthony Crudele, chairman of the Board of Directors of Hibbett.
All in all, it’s a good deal for the shareholders, but attention will now be on how the deal benefits JD Sports. Hibbett have forecasted a modest 2 per cent increase in sales between 2024 and 2025, and JD have stated that the acquisition will benefit them through Hibbett’s ‘strong brand positioning’ and ‘significant store presence’.