Retailer JD Sports has announced the competition watchdog’s decision to block its acquisition of Footasylum has been quashed.
The Bury-headquartered company announced it was to acquire Rochdale-based Footasylum in a £90m deal in 2019, but the Competition and Markets Authority (CMA) ruled against it in May.
In a statement, JD Sports said the case will now be remitted to the CMA for “full reconsideration and the CMA’s previous order, which would have forced the group to divest the Footasylum business, will be cancelled”.
Peter Cowgill, executive chairman of JD Sports Fashion Plc, said: “We have always maintained that this merger would provide significant long-term benefits to customers, colleagues and brand partners, and so we are very pleased with the competition appeal tribunal’s judgment today.
“The entire case will now go back to the CMA for re-consideration and we look forward to presenting further evidence which demonstrates the true extent to which the competitive landscape has evolved, in particular as a result of the unprecedented challenges caused by the COVID-19 pandemic.”
An investigation from the competition’s watchdog found the acquisition would “result in a substantial lessening of competition in sports-inspired casual footwear and apparel”.
However, the tribunal agreed that the CMA didn’t follow up on inquiries with suppliers and “came to conclusions as to the likely effects of the Covid-19 pandemic”, and that the watchdog didn’t fully understand the effects the pandemic had on the increase in Nike and Adidas’s direct-to-consumer operations.