UK retailer JD Sports Fashion is looking to expand its business in Europe after signing an agreement to merge its JD Sprinter Holdings divisions in Spain and Portugal with the Sport Zone business of retailer Sonae SGPS SA.

The agreement will see the creation of the Iberian Sports Retail Group, whose shareholders will be the JD Group, Sonae and the family shareholders of JD Sprinter, with stakes of around 50%, 30% and 20%, respectively.

Sonae and JD Sprinter have a deep knowledge of sports retail in Portugal and Spain and both are expected to play a key role in the future strategic and operational management of the Iberian group.

With an estimated combined turnover of EUR450m (US$475.3m) and a store network of 287 stores – 191 in Spain and 96 in Portugal – the Iberian Group will become the second largest Iberian sports retailer and is expected to generate further "scale, momentum and resources" to continue the current growth of the JD Group.

In January, JD Sports confirmed its acquisition of Manchester-based sales and distribution company 2Squared Agency. The deal was the second in just three months for JD Sports, after buying rival Go Outdoors for GBP112m (US$139.2m) in November, and menswear chains Appearance and Xile Clothing.

JD Sports snaps up distribution firm 2Squared Agency