Dick’s Sporting Goods is in the final stages of acquiring Foot Locker, a deal that an analyst describes as a ‘bold move’.

The companies have discussed a deal at $24 per share, representing an 86.5 per cent premium to Foot Locker’s last closing price, the Wall Street Journal reported, citing people with knowledge of the matter.

The deal could be finalized as soon as this week, the report added.

According to GlobalData MD Neil Saunders, this is a bold move to consolidate Dick’s power in the sporting goods arena and to provide it with a steeper growth trajectory.

At present, Dick’s is the largest specialist player in the US sporting goods market with an 11.1 per cent share. While there is scope for further growth, Saunders believed the headroom is becoming more limited.

The analyst said that acquiring Foot Locker and its 4.3 per cent market share would provide Dick’s with an immediate boost, more bargaining power with national brands, and potential synergistic savings.

Although Foot Locker remains on the back foot with its market share down 1.8 per cent since 2019, this could be an advantage for Dick’s as it could engineer a recovery with its extensive retail skills and add significant value, he continued.

“While there is some overlap between the locations, the nature of the stores is different, and Foot Locker would give Dick’s access to a wider selection of malls and customers. This, in turn, might produce some interesting product collaborations with Dick’s likely being able to strengthen Foot Locker’s sporting apparel offer.”

Saunders also mentioned the potential regulatory barriers given Dick’s dominance in the market.

Shares of Foot Locker surged 62.32 per cent in extended trading following the news on Wednesday, while Dick’s was down about 5 per cent.