JD Sports’ takeover of Footasylum to be investigated by CMA

The CMA has announced it is investigating the completed acquisition by JD Sports of Footasylum.

The CMA said it has “reasonable grounds” for suspecting that it may be the case that JD Sports and Footasylum have “ceased to be distinct”. It added that the merger may be expected to result in a “substantial lessening” of competition in any market or markets in the United Kingdom.

The sports fashion retailer announced its £90.1m Footasylum takeover had been given the go-ahead by shareholders on 25 April, after it was voted through at a meeting on 12 April.

Over 78 million Footasylum shareholders voted for the JD Sports deal, which is said to represent around 75% of the retailer’s capital. Following the vote, JD Sports has sent a formal compulsory acquisition notice to Footasylum which is yet to be accepted by shareholders.

A shares transfer following the compulsory acquisition notice is expected to happen on 5 June, ending the footwear retailer’s short time as a publicly listed company.

The sportswear retailer already owns a stake in footwear specialists Footasylum, having bought a percentage of its share capital in February. JD Sports is set to activate Section 979 of the Companies Act 2006, in order to acquire the footwear retailer’s remaining stores.

In March, JD Sports went public with its bid for Footasylum, with a statement claiming the sportswear retailer had “reached [an] agreement on the terms of a recommended cash offer”.

Peter Cowgill, executive chairman of JD, said at the time of the offer: “We are pleased to make this Offer for Footasylum, which is very complementary to our existing businesses in the UK.

“We believe that there will be significant operational and strategic benefits through the combination of the very experienced and knowledgeable management team at Footasylum and our own expertise.”