UK CMA to probe JD Sports' Footasylum takeover
July 29, 2019 - United Kingdom
The UK Competition and Markets Authority (CMA) recently confirmed it will start the initial phase of investigation into JD Sports’ £90-million takeover of Footasylum to find out if that could result in ‘a substantial lessening of competition in any market’. The probe has a September 19 deadline, whereby CMA would reveal the needs for a full Phase II probe.
JD Sports first announced in March that it would acquire the footwear retailer and the deal was greenlit by shareholders by the next month. JD Sports had already owned a stake in Footasylum, having bought 19 per cent of its issued share capital in February.
A £90-million deal for the remaining shares was made and the acquisition subsequently became unconditional on April 12. By May, JD Sports had snapped up almost all of the shares in Footasylum.
JD Sports and Footasylum parent company, the Pentland Group, were then issued with an initial enforcement order from the CMA before the Phase I initial probe announcement, according to British media reports. Until a decision is made by the CMA, JD Sports and Pentland are banned from taking any actions to integrate the two businesses.
When JD Sports purchased its stake in Footasylum in February, it told investors that it would not purchase Footasylum outright.
Footasylum was founded by John Wardle and David Makin, who also founded JD Sports. (DS)