JD Sports Deal for Footasylum Blocked Again by U.K. Regulator
(Bloomberg) -- Britain’s antitrust regulator again provisionally blocked JD Sports Fashion Plc’s proposed takeover of smaller rival Footasylum, but the sneaker retailer said it remains committed to pursuing the deal.
The 90 million-pound ($124 million) takeover could “lead to a worse deal for shoppers,” including higher prices, fewer discounts and less choice of products, the Competition and Markets Authority said in a statement Thursday.
The regulator previously blocked the deal in May 2020, but that decision was overturned by an appeals tribunal that said the CMA had not gone far enough when gathering information about the potential impact of the pandemic on competition.
The regulator is not considering that JD Sports relies on Nike Inc. and Adidas AG to supply the products it sells but also increasingly has to compete against the big sneaker brands’ online retail offers, which have expanded during the pandemic, JD Sports said.
“We have made compelling submissions on the committed positioning of the global brands towards direct-to-consumer and the consequent impact on an extremely competitive marketplace,” said Peter Cowgill, chief executive officer of JD Sports. “I am perplexed and again disappointed that these have been rejected.”
If JD Sports succeeds in buying Footasylum it will work to increase the quality, range and choice of products available, he said.
JD shares were little changed early Thursday.
The CMA is expected to issue a final ruling in October.
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