Senator Warren Flags Anti-Trust Risk In Dick’s Sporting Goods $2.4B Bid For Foot Locker

Senator Elizabeth Warren is reportedly urging the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to scrutinize and potentially block the proposed acquisition of Foot Locker Inc. (FL) by Dick’s Sporting Goods Inc. (DKS), citing antitrust concerns.

Dick’s Sporting Goods’ stock rose nearly 2% in midday trade, and Foot Locker’s stock was up around 1.5%. On Stocktwits, retail sentiment around DKS moved higher into ‘extremely bullish’ territory from ‘bullish’ a day ago, while retail sentiment around FL moved lower but remained in ‘extremely bullish’ territory over the past day.

In a letter sent Tuesday evening, cited by CNBC, Warren said the $2.4 billion merger could lead to higher prices, job losses, and reduced competition. It warned that the deal could create a “duopoly” in the athletic footwear market, with the merged entity and JD Sports dominating the space.

JD Sports has been acquiring smaller competitors like Finish Line, Shoe Palace, DTLR, and Hibbett since 2018. According to Warren, such rapid consolidation witnessed in the athletic shoe store sector is why the risks of the merger are greater right now. She cited that if Dick’s Sporting Goods’ acquisition of Foot Locker is approved, the two companies – JD Sports and the new combined entity – would own 5,000 athletic shoe stores in the U.S., which could pose a considerable threat to smaller businesses.

“This is particularly concerning given that more than half of parents ‘plan to sacrifice necessities, such as groceries,’ because of rising prices for back-to-school shopping,” the letter said, citing a July survey from Credit Karma. “Higher prices on athletic footwear could lead to further economic hardship for parents.” 

Warren has asked regulators to “closely scrutinize” the transaction and “block the deal” if it’s found to violate antitrust law.

Read also: Trump Hits India With 25% Additional Tariff Over Russian Oil – Warns Retaliation Will Trigger Further Action

For updates and corrections, email newsroom[at]stocktwits[dot]com.