Competition watchdog kicks off probe into JD Sports’ Footasylum acquisition
The competition watchdog has kicked off its probe into JD Sports’ acquisition of Footasylum.
JD Sports bought the remaining shares in the footwear retailer in a deal worth £90m in March this year, with shareholders approving the sale the following month.
Read more: JD Sports on track to meet profit expectations
However, the Competition and Markets Authority (CMA) handed an initial enforcement order to the companies in May, which banned the integration of the two businesses.
The CMA has now announced it will launch a full merger inquiry. The watchdog will decide whether to refer the merger for a phase two investigation by 19 September.
JD Sports initially bought a 19 per cent stake in Footasylum in February before the retailer’s board removed a restriction that prevented JD making an offer on the rest of the business.
In March JD Sports’ executive chairman Peter Cowgill said that the business was “complementary” to its portfolio in the UK.
Read more: JD Sports bucks high street woes to boost profit and revenue
“We believe that there will be significant operational and strategic benefits through the combination of the very experienced and knowledgeable management team at Footasylum and our own expertise,” he added.
Footasylum warned on profits twice last year and saw its initial £171m market value fall to less than £49m before the take over.