…By Henry George for TDPel Media.
In a move that solidifies its ambition for global dominance, JD Sports has agreed to acquire the remaining stake of its Spanish, Dutch, and Portuguese arm, Iberian Sporting Retail Group (ISRG), for €500 million (£427 million).
With the aim of exerting greater control over the business, JD Sports plans to open 500 international stores over the next five years.
JD Sports’ Acquisition and Expansion Strategy:
Having previously owned just over half of ISRG, JD Sports seeks to consolidate its position in the market by acquiring the remaining stake.
This move aligns with the company’s strategy of expanding its presence globally.
By bringing ISRG closer to its operations, JD Sports anticipates significant potential for accelerated growth.
ISRG’s Profit and Operations:
ISRG, which includes Sprinter in Spain, Sport Zone in Portugal, and Aktiesport and Perry Sport in the Netherlands, reported a profit of €96.6 million last year on revenue of €1.24 billion.
This acquisition allows JD Sports to further tap into these lucrative European markets and capitalize on their growth potential.
Acknowledgment to Minority Shareholders:
JD Sports CEO Régis Schultz expressed gratitude to the minority shareholders, Sonae Holdings and Balaiko Firaja Invest, for their contributions to the business during their partnership.
The acquisition strengthens JD Sports’ position as the driving force behind ISRG’s growth trajectory.
JD Sports’ Aggressive Global Expansion:
Analysts at Peel Hunt pointed out that this acquisition follows shortly after a licensing deal in the Middle East, underscoring JD Sports’ determination to expand its global reach.
Taking full control of ISRG enables JD Sports to have greater influence over its growth prospects in the attractive European markets.
The analysts believe that the global growth potential of JD Sports is currently undervalued.
Closing and Share Performance:
The acquisition is expected to conclude in October, solidifying JD Sports’ position in the Spanish, Dutch, and Portuguese markets.
Following the announcement, JD Sports’ shares experienced a slight increase of 0.2p, reaching 138.3p.
This positive market response reflects investor confidence in the company’s strategic expansion plans.