Saks Inc. and Hudson's Bay Company (HBC) announced that they made a definitive merger agreement. In a statement, the companies revealed that HBC will be acquiring Saks for US $16 for each share. The transaction is valued at around US $2.9 billion.
The agreement will effectively combine Saks Fifth Avenue, Lord & Taylor and Hudson's Bay to form as one merchant that will cater to all consumer classes: from outlet retail, luxury and mid-tier. The three brands are considered to be three of the most recognizable in the retail sector.
Prior to the merger, revenue forecast for HBC would have reached CAD $7.2 billion in fiscal year 2012 while Saks's projected sales would have reached CAD $587 million.
Richard Baker, HBC chairman, said they have a long relationship with Saks and they grabbed at the opportunity "to bring one of the world's most recognized luxury retailers into the HBC family."
"This acquisition will increase our growth potential both in the U.S. and Canada," he added.
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