JD Sports Fashion Acquires Hibbett Inc for $1.08 Billion, Expands Presence in Southeastern US”.

British sportswear retailer JD Sports Fashion has announced its plan to acquire American athletic fashion retailer Hibbett Inc for around $1.08 billion, as it aims to expand its presence in the southeastern United States. The move is strategic as shares in athletic clothing retailers have come under pressure globally due to weak outlooks from major sports apparel makers like Nike and Puma.

Last month, JD’s U.S rival Foot Locker issued a warning on profits for 2024, while Adidas raised its 2024 forecast due to strong demand for its sneakers. JD Sports is optimistic about the market picking up momentum with events like the Euro soccer championships, Paris Olympics, and the introduction of new styles of trainers and track suits.

JD Sports will pay $87.50 per Hibbett share in cash, offering a premium of about 20% to Hibbett’s last closing price. Hibbett’s shares jumped 18% to $85.70 in premarket U.S trading following the announcement. With Hibbett operating about 1,169 stores across 36 U.S states, JD Sports believes the acquisition will significantly expand its geographic presence in the country.

JD Sports, based in Bury, Greater Manchester, plans to fund the deal and refinance Hibbett’s current debt using its U.S cash reserves of $300 million and a $1 billion extension to its existing bank facilities. The acquisition of Hibbett is expected to contribute to JD Sports’ earnings in the first year of ownership and result in cost savings of at least $25 million, contributing to an enlarged group with combined revenues of approximately 4.7 billion pounds in North America with the region’s contribution to overall sales rising to about 40% from current 32%.