JD Sports has unveiled plans to combine its businesses in Spain and Portugal with Sonae-owned Sports Zone.

The sportswear business has agreed a “memorandum of understanding” with Sonae, which is one of the largest sportswear retailers in the region.

The deal would see JD’s Spanish and Portuguese operations, run by JD Sprinter Holdings, combine with Sports Zone to create Iberian Sports Retail Group.

JD Group would hold approximately 50% of the shareholdings in the new company, with Sonae owning 30% and JD Sprinter 20%.

The retailer said that both Sonae and JD Sprinter have “a deep knowledge of sports retail” in Spain and Portugal and would play “a key role” in the future strategy and management of Iberian Sports Retail Group.

The new group would boast combined sales of more than €450m and a portfolio of 287 stores – 191 in Spain and 96 in Portugal – making it the second largest sports retailer in the Iberia region.

JD said the formation of the combined group would generate “further scale, momentum and resources” to grow.

The retailer unveils its preliminary results on April 11.