Foot Locker and Dick’s Sporting Good Stores.
Reuters
Senator Elizabeth Warren calls the FTC and the Doj to consider blocking Dick’s Sporting Goods’ proposed acquisition of Foot lockerWriting in a letter to agencies that the merger could reduce jobs, increase prices and reduce competition.
The missive, sent on Tuesday evening, asks agencies to “closely examine” the merger of $ 2.4 billion and “block the agreement” if they determine it violates antitrust laws. Warren, D-Mass., Specifies in the letter, which was seen by CNBC, that the link could create a duopoly in sneakers and other sports shoes between combined companies and its next largest competitor, JD Sports.
“This is particularly worrying since more than half of the parents plan to sacrifice the necessities, such as the grocery store,” due to the rise in prices for back -to -school purchases, “wrote Warren, citing a survey in July of Credit Karma.” Higher prices on athletic shoes could lead to new economic difficulties for parents. ”
Warren said that the risks of merger are aggravated by the sports shoe store sector consolidating rapidly. The Briton JD Sports has kept eyes on the United States as its largest growth market and, since 2018, has been buying a purchase series, taking small competitors such as the finish line, the shoe palace, the DTLR and Hibbett.
If the acquisition of football locker by Dick’s Sporting Goods is approved, two companies – JD Sports and the combined entity – would have 5,000 sports shoes stores in the United States, which could lead to small businesses, Warren said.
“Dick’s and Foot Locker currently compete and with independent retailers to obtain agreements with suppliers. The new giant would have considerably increased power to extract favorable conditions with manufacturers,” she wrote. “This could mean that independent retailers are disadvantaged when it comes to negotiating with suppliers, which could encourage Dick and Foot Locker to engage in anti -competitive driving to prevent suppliers from dealing with independent retailers.”
Under President Joe Biden, the Federal Trade Commission adopted an aggressive approach to mergers and canceled a certain number of high -level ties, in particular Tapestry proposed acquisition of Corsair And Kroger attempt at acquisition Albertson. When President Donald Trump took office in January, many at Wall Street expected his administration to facilitate larger mergers.
Until now, his administration has approved at least one agreement previously blocked by Biden – the acquisition of Nippon Steel from US Steel – but it is not clear how the new leadership at the FTC and the Ministry of Justice will see mergers in the retail industry, which can be more acute by consumers.
Amanda Lewis, who has spent almost a decade examining mergers at the FTC and is now a partner of Cuneo Gilbert and Laduca, previously told CNBC that the merger would not be likely to raise many concerns because combined, Dick’s and Foot Locker would represent around 15% of the sports products.
“Usually, below 30%, does not raise too many agency red flags,” said Lewis.
Lewis said it expects the merger to be approved and at most, Dick could be required to sell some of its stores to competitors to preserve competition in the local markets. The number of stores he would potentially need to give in could be lower and perhaps more pleasant to the taste under Trump’s FTC than that of Biden, said Lewis.
The DoJ and the FTC did not return any requests for comments.