10:46 AM EDT, 05/15/2025 (MT Newswires) -- Dick's Sporting Goods (DKS) agreed to acquire Foot Locker ( FL ) for an equity value of roughly $2.4 billion, sending the footwear and apparel retailer's shares soaring.

For each share owned in Foot Locker ( FL ), investors have an option to receive $24 in cash or 0.1168 of Dick's shares, the companies said in a joint statement. The cash offer represents a premium of roughly 66% to Foot Locker's ( FL ) 60-day average price.

The transaction, which requires approvals from regulators and Foot Locker's ( FL ) shareholders, is expected to complete in the second half of the year. Foot Locker's ( FL ) stock jumped 83% in Thursday trade, while sporting goods retailer Dick's slumped 16%.

"We believe there is meaningful opportunity for growth ahead," Dick's Executive Chairman Ed Stack said. "By applying our operational expertise to this iconic business, we see a clear path to further unlocking growth and enhancing Foot Locker's ( FL ) position in the industry."

Foot Locker ( FL ), which has about 2,400 retail stores worldwide, will be operated as a separate unit within Dick's.

"By joining forces with Dick's, Foot Locker ( FL ) will be even better positioned to expand sneaker culture, elevate the omnichannel experience for our customers and brand partners, and enhance our position in the industry," said Foot Locker ( FL ) Chief Executive Mary Dillon. "We are pleased to provide shareholders with a transaction structure that offers the choice of significant and immediate cash value or the opportunity to invest in the combined company and benefit from the substantial upside potential."

The transaction is expected to be accretive to Dick's earnings per share in the first full fiscal year after the deal's completion and deliver $100 million to $125 million in cost synergies in the medium term, according to the statement.

Separately, Dick's on Thursday announced preliminary non-GAAP EPS of $3.37 and comparable sales growth of 4.5% for its fiscal first quarter that ended May 3. The quarterly results are set to be released on May 28.

Foot Locker ( FL ) separately said it expects to report a non-GAAP loss of $0.07 per share for its fiscal first quarter, compared with a $0.22 profit a year earlier. Analysts were expecting a loss of $0.03. Comparable sales likely fell 2.6% year over year, Foot Locker ( FL ) said, compared with 0.7% growth modeled by five analysts. The company will release its results on May 29.

"Our preliminary first quarter results are below our expectations as we experienced softer traffic trends globally," Dillon said. "We continued to manage our promotional levels and maintain inventory and expense discipline, and we have taken actionable steps to advance these efforts and remain nimble and well positioned in an uncertain macroeconomic backdrop."

Price: 177.80, Change: -31.82, Percent Change: -15.18