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Hudson’s Bay Company To Acquire Saks Incorporated For US$16 Per Share, Bringing Together Three Iconic Retail Brands

Stocks in this article: HBC SKS

Hudson’s Bay Company (TSX: HBC) (“HBC” or the “Company”) and Saks Incorporated (NYSE: SKS) (“Saks”) announced today that they have entered into a definitive merger agreement whereby HBC will acquire Saks for US$16.00 per share in an all-cash transaction valued at approximately US$2.9 billion, including debt. The transaction has been approved by each company’s board of directors and is expected to close before the end of the calendar year, subject to approval by Saks shareholders, regulatory approvals and other customary closing conditions.

This transaction will bring together three of the retail industry’s most iconic brands – Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue – to create a leading North American retailer addressing a broad consumer spectrum across the luxury, mid-tier and outlet retail sectors. HBC will continue to build upon Saks’ market-leading position and identity as a luxury retailer. The combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites. The combined company would have generated pro forma sales and normalized EBITDA in fiscal 2012 of approximately C$7.2 billion and C$587 million, respectively, before any synergies. HBC expects to achieve C$100 million of annual synergies within three years.

“This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers,” stated Richard Baker, HBC’s Chairman and CEO. “I’ve had a long connection with Saks over the years, and am thrilled to bring one of the world's most recognized luxury retailers into the HBC family. With the addition of Saks, HBC will offer consumers an unprecedented range of retailing categories and shopping experiences. 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.”

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