Sportswear chain JD Sports has agreed to sell Footasylum for less than half the amount it paid for the business three years ago.
It came after the UK’s competition watchdog ruled that the merger could lead to less choice and a “worse deal” for customers.
JD Sports paid £90m for the sports footwear and clothing retailer in 2019. It will now sell the business to private equity firm Aurelius, which owns Lloyds Pharmacy, for £37.5m.
Earlier this year JD Sports and Footasylum were fined almost £4.7m by the Competition and Markets Authority for sharing commercially sensitive information during its investigation.
JD Sports is also believed to have spent millions of pounds on external competition lawyers, the Guardian newspaper reports. The company had already taken a £55.6m writedown in 2021 after finding that the value of Footasylum was less than it had thought, and £7.4m in costs in 2020 directly related to the acquisition.
Fotasylum is expected to generate total revenues of more than £287m this year with an attractive EBITDA margin, Aurelius said.
The transaction is expected to be completed in August 2022.
