JD Sports Fashion to sell Footasylum to Aurelius Group for £38M
JD Sports Fashion, the British sportswear retail, plans to sell Footasylum to German investment firm Aurelius Group for around £38 million ($46 million), concluding a long saga with United Kingdom’s anti-competition watchdog.
Why it matters: The sale (for less than half of what JD Sports paid initially) shows how difficult it is to transact in the U.K. market, where antitrust regulators are cracking down on takeover bids that could lead to a “worse deal” for consumers.
Catch up quick: JD Sports paid £90 million in 2019 to acquire rival Footasylum, in a bid to solidify a dominant position in the sportswear market.
- The takeover raised hackles at the U.K.'s Competition and Markets Authority, kicking off a battle over competition concerns on price, quality, range and service.
- JD Sports challenged the regulator in 2020, successfully arguing the CMA was not considering pandemic impact on competition in the market.
Yes, but: Footasylum has been a drag on JD Sports' balance sheet. The company took a £55.6m write-down in 2021, after realizing Footasylum was originally over-valued.
Of note: Last month, the CMA said it is investigating Amazon.com’s U.K. marketplace over concerns the e-commerce giant was giving an advantage to its own retail business over third parties.