Hudson’s Bay Co., the owner of Lord & Taylor, has bought Saks Fifth Avenue for $16 per share in a transaction valued at $2.9 billion.
The transaction is expected to close before the end of the year, subject to certain approvals.
While a plan to merge Saks and Neiman Marcus ultimately fizzled, the new deal is meant to bring Saks, Lord & Taylor, and Canada’s Hudson’s Bay together to create a leading North American retailer.
“This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers,” stated Richard Baker, HBC’s chairman and CEO, in a statement.
Saks Inc. operates 41 Saks Fifth Avenue stores, 67 Saks Fifth Avenue OFF 5TH stores, and the website saks.com. Saks-licensed stores are located in Dubai, U.A.E.; Mexico City and Polanco, Mexico; Manama, Bahrain; and Almaty, Kazakhstan.
The combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores, throughout the U.S. and Canada, along with three e-commerce sites. Hudson Bay expects to achieve $97 million in annual synergies within three years.
“This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders,” Baker said in the statement.
Hudson’s Bay Co. will finance the transaction, and refinance certain existing indebtedness at HBC, with a combination of approximately $1 billion of new equity, $1.9 billion of senior secured loans, and $400 million of senior unsecured notes and available cash on hand.
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