UK-based sports apparel company JD Sports Fashion has reached a non-binding headline agreement to sell its Sports Unlimited Retail business to Iberian Sports Retail Group (ISRG).

Based in the Netherlands, Sports Unlimited Retail is a wholly-owned company operating under the Aktiesport and Perry Sport fascias.

JD Sports, which currently owns a 50.02% stake in ISRG, will continue making strategic decisions that pertain to Sports Unlimited Retail’s future.

JD executive chairman Peter Cowgill said “We have an excellent management team at ISRG and, having successfully integrated the Sport Zone business into its operations, this is the right time for ISRG to further expand its geographical reach.

“By consolidating our sporting goods businesses under the ISRG umbrella, we are absolutely confident that the transfer of Sports Unlimited Retail to ISRG will bring long term development opportunities to both the team at Sports Unlimited Retail and their international brand partners.”

JD will release an additional statement related to the sale after the completion of the transaction.

The deal is valued at €16.5m and ISRG will pay the amount after the deal’s completion, which is expected to take place on 30 June.

Portuguese holding company Sonae-SGPS and Spanish firm Balaiko Firaja Invest are ISRG’s substantial shareholders.

ISRG will fund the transaction with its cash balance and other resources.

In its filing, JD said: “The rationale for the transaction is that ISRG is more focused on the sporting goods sector than the core JD brand.

“We feel, therefore, that ISRG’s management team will be better placed to drive growth and higher returns in Sports Unlimited Retail in the longer term.”

JD recently dismissed speculations that Mr Cowgill was set to step down as the company’s executive chairman.

In December, the company acquired a 100% stake in US company Shoe Palace for £240m ($325m) in cash.