JD Sports Fashion PLC (LON:JD.) is considering merging its assets in Spain and Portugal with a division of Portuguese retailer, Sonae.
Sonae owns the Sport Zone business; one of the largest sports retailers in the region.
JD has entered into a memorandum of understanding (MoU) with Sonae which sets out the basis for a merger between JD’s existing businesses in Spain and Portugal – JD Sprinter – and Sport Zone.
If it goes ahead, the Iberian Sports Retail Group would become the second largest Iberian sports retailer and “will generate further scale, momentum and resources to continue the current growth of the JD Group,” the UK high street chain said.
ISRG would have an estimated combined turnover roughly €450mln and a network of 287 stores, of which 191 would be in Spain and 96 in Portugal.
JD would be the majority shareholder of any new group with a 50% stake, while Sonae would hold 30%. The remaining 20% would be held by the family shareholders of JD Sprinter.
Both companies will play a “key role in the future strategic and operational management of the Iberian group”, JD added.
Shares in JD opened modestly higher at 361p on Thursday.