British retailer JD Sports will acquire American rival Hibbett for $1.08 billion

(Reuters) -JD Sports Fashion has proposed to buy U.S. athletics fashion retailer Hibbett Inc for about $1.08 billion, the companies said on Tuesday, as the British sportswear retailer expands in the U.S. southeast.

JD Sports, Britain’s largest sportswear retailer, will pay $87.50 per Hibbett share in cash, marking a premium of around 20% to the US company’s last closing price.

The Bury, Greater Manchester-based company said it expects to finance the deal and refinance Hibbett’s existing debt through its existing US cash resources of $300 million and a $1 billion expansion of existing banking facilities.

The expanded group would have had combined sales of about 4.7 billion pounds ($5.80 billion) in North America, JD Sports said, adding that the region’s contribution to total sales would rise from the current 32% to about 40%.

($1 = 0.8108 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips)