In an effort to expand its international presence, reach new consumers and gain traction in the sneaker market, Dick's Sporting Goods is taking over Foot Locker in a $2.4B deal.

“By joining forces with DICK’S, Foot Locker will be even better positioned to expand sneaker culture, elevate the omnichannel experience for our customers and brand partners, and enhance our position in the industry,” Foot Locker CEO Mary Dillon said in a statement.

Foot Locker has struggled, and its stock had dropped sharply over the year, making it a target for a deal like this, CNBC reported. In 2023, Foot Locker announced plans to close 400 stores by 2026, seeking to get out of malls.

In Thursday morning trading, Foot Locker shares were up more than 80% from $12.87 at market close Wednesday, The Wall Street Journal reported.

Dick’s shares hit record levels in January but in morning trading on Thursday, they were down more than 16%, according to the WSJ. The dip suggests shareholders are skeptical of the acquisition, and they aren't the only ones.

“In our view, there are countless examples of M&A destroying billions of dollars in value since we have covered the sector,” John Kernan, an analyst at TD Cowen, wrote in a research note discussing the deal.

Kernan went on to say there isn't really a precedent for mergers in this corner of the retail market creating shareholder value.

The two stores offer different experiences, and it seems they will continue to do so. Dick's plans to run Foot Locker as a standalone business and maintain the store's name, according to the WSJ. Foot Locker has about 2,400 mostly smaller stores in countries around the world. Dick's operates about 800 stores only in the U.S., most of which are big-box locations.

“The combination of [Dick's and Foot Locker] for the consumer is not the most important thing, it’s making sure that there’s two powerful brands that are meeting all consumer needs, wherever, whenever, however they want to shop,” Dick's CEO Lauren Hobart said.