Sports Direct International said it agreed sell its rights to the Dunlop brand and related wholesale and licensing businesses to Sumitomo Rubber Industries (SRI) for $137.5 million in cash.

Sports Direct said the Dunlop business currently operates in the UK, Europe, Asia (except Japan, Korea and Taiwan), USA and Canada.

For the year ended April 24, 2016, it had combined revenue of £42.64 million, gross assets of £41.76 million and profit before tax of £4.06 million.

As part of the transaction, SRI will grant Sports Direct a royalty free licence to continue to use the Dunlop brand for premium workwear and safety wear for Sports Direct’s own retail purposes.

SRI has the option to acquire these rights in the future subject to certain “mechanical conditions” for $12.5 million.

“The divestment of the Dunlop Business and the transaction is in line with Sports Direct’s stated aspiration to become the ‘Selfridges’ of sports retail, including its renewed focus on its core UK business and the development of its relationships with third party brands,” said Sports Direct.

“Sports Direct’s senior management team currently needs to prioritise the core UK businesses and relationships with third party brands and does not currently have the bandwidth to develop and manage international brands simultaneously.

“As such, Sports Direct intends to use the proceeds of sale from the transaction in its commitment to its third party brand relationships.”

The deal is conditional upon merger clearance in Germany and the Philippines.

Subject to merger clearance in those jurisdictions, the transaction is expected to complete before May 31, 2017.