Planned Acquisition of Foot Locker, Inc.

6 Months Ended

Aug. 02, 2025

Planned Acquisition of Foot Locker, Inc.

Overview

On May 15, 2025, the Company announced it entered into a definitive merger agreement (the “Merger Agreement”) to acquire Foot Locker, a leading footwear and apparel retailer (the “Transaction”). Under the terms of the Merger Agreement, Foot Locker shareholders will elect to receive either (i) $24.00 in cash or (ii) 0.1168 shares of DICK’S Sporting Goods common stock for each share of Foot Locker common stock, for a total equity value of approximately $2.4 billion and an enterprise value of approximately $2.5 billion. On August 22, 2025, Foot Locker shareholders voted to adopt the Merger Agreement. Additionally, the Company has received all required regulatory approvals and expects the Transaction to close September 8, 2025, subject to the satisfaction or waiver of remaining customary closing conditions. Foot Locker shareholders have until August 29, 2025 to make their merger consideration election. To the degree Foot Locker shareholders do not elect to receive their consideration entirely in shares of the Company’s common stock, the Company intends to finance the Transaction through a combination of cash-on-hand, revolving borrowings and other new debt.

Exchange Offer and Consent Solicitation

On June 6, 2025, the Company issued a press release announcing, in connection with its planned acquisition of Foot Locker, an offer to exchange (the “Exchange Offer”) any and all outstanding 4.000% Senior Notes due 2029 issued by Foot Locker (“Foot Locker Notes”) for up to $400.0 million aggregate principal amount of new 4.000% Senior Notes due 2029 issued by the Company (“DICK’S Notes”) and in certain instances, cash, and the related solicitation of consents (the “Consent Solicitation”) to adopt certain proposed amendments to the indenture relating to the Foot Locker Notes. The deadline for eligible holders to tender Foot Locker Notes is September 9, 2025. As of August 26, 2025, the following principal amount of Foot Locker Notes have been validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked) (dollars in thousands):


Title of Foot Locker Notes / CUSIP / ISIN No.	Aggregate Principal Amount Outstanding		Foot Locker Notes Tendered
			Principal Amount		Percentage
4.000% Senior Notes due 2029 144A: 344849AA2 / US344849AA21 Regulation S: U3449AAA5 / USU3449AAA52	$	400,000	$	379,741	94.94	%

In addition, the Company received the requisite number of consents to adopt certain proposed amendments to the Foot Locker Notes that would eliminate substantially all of the restrictive covenants, certain affirmative covenants and certain events of default, subject to conditions related to the completion of the Transaction. The Exchange Offer and Consent Solicitation are subject to the satisfaction of certain conditions, including the completion of the Transaction. The completion of the Transaction is not subject to the consummation of the Exchange Offer or Consent Solicitation.

Bridge Facility

In connection with the Merger Agreement, the Company also entered into a commitment letter, dated as of May 15, 2025, with Goldman Sachs Bank USA (“GS Bank”), supplemented by the joinder on May 30, 2025 of certain other financial institutions, pursuant to which GS Bank and such other financial institutions agreed to provide a senior unsecured 364-day bridge term loan credit facility in an aggregate principal amount of up to $2.4 billion (the “Bridge Facility”) for the purpose of financing all or a portion of the Transaction and related costs and expenses. The availability of the Bridge Facility commitments is conditioned on the consummation of the Transaction in accordance with the Merger Agreement and certain other customary closing conditions.

In June 2025, the aggregate commitments under the Bridge Facility were reduced to $1.75 billion, following the receipt of requisite consents to effect certain proposed amendments that govern the Foot Locker Notes in connection with Company’s $400.0 million Exchange Offer for any and all of the outstanding Foot Locker Notes, as well as the Company’s entry into the Credit Agreement during the current quarter. Additionally, $250 million of revolving commitments under the Company’s $2.0 billion Credit Facility are reserved under the Credit Agreement to be available on a customary “certain funds” basis to help finance the Transaction and related costs and expenses.

Financial Statement Impacts

During the 13 weeks ended August 2, 2025, the Company incurred pre-tax Foot Locker acquisition-related costs of $12.5 million, consisting of $8.0 million in merger and integration costs, which includes legal and regulatory fees and other professional services related to the pending Transaction, as well as $4.5 million of interest expense related to the amortization of $7.9 million in deferred financing fees paid for the Bridge Facility during the current quarter.

- Definition

The entire disclosure for business combination.

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+ Details

DICK'S SPORTING GOODS, INC. 10-Q