Updated from 10:58 a.m. ET.

Luxury goods maker

LVMH Moet Hennessy-Louis Vuitton

(LVMHY)

said Monday it has offered to acquire designer clothing maker

Donna Karan

for $8.50 a share, a 74% premium over its Friday closing price of $4.88. The deal is valued at approximately $195 million.

LVMH also has agreed to acquire privately held

Gabrielle Studio

, a licensor of Donna Karan trademarks, from Donna Karan and her husband, Stephen Weiss, for $450 million. The price tag would fall by $50 million if the LVMH-Donna Karan merger is consumated within a year. Once the deals are completed, LVMH would combine the two companies. LVMH said Karan and Weiss would exchange a "significant portion" of their Donna Karan shares for shares of the new entity and would invest in additional shares. Karan will continue to act as chief designer.

Shares of LVMH were up 13 cents, or 1%, to $13.06 in recent trading on the

Nasdaq

. Donna Karan shares were up 74%, or $3.63, to $8.50 on the

New York Stock Exchange

.