While most brands need to focus on their own digital and store assets to grow their direct-to-consumer business, Nike (NKE) has another option – a combination with Foot Locker (FL), Citi analyst Paul Lejuez tells investors in a research note. Nike product represents 70% of Foot Locker sales, and there are “many reasons” a combination of the two businesses makes financial and strategic sense in the current environment, says the analyst. He notes that if Nike paid $67 per share for Foot Locker, a 50% premium to the current price, it would represent a $6B enterprise value. That is less than 3% of Nike’s market cap, says Lejuez, who estimates Foot Locker will generate $400M-$500M of free cash flow annually over the next five years. Based on his assumptions, an acquisition of Foot Locker would be 30c accretive to Nike’s earnings per share. Lejuez believes Foot Locker is worth more to Nike than Foot Locker is worth on its own.