Calvin Klein, Tommy Hilfiger, Izod, Speedo Brand are United in $2.9 Billion Deal

PVH a clothing maker whose brands include Tommy Hilfiger, Izod and Calvin Klein sportswear, agreed to pay $51.75 in cash plus nearly a fifth of a share of its stock for each share of Warnaco Group Inc., which licenses the Speedo brand and Calvin Klein underwear and jeans.

The deal, expected to close early next year, would unite the Calvin Klein brand at a single manufacturer and give PVH a bigger global footprint, especially in emerging markets, said PVH Chief Executive Manny Chirico, in an interview.

The acquisition is the second big purchase for PVH in just over two years, and will increase its clout with the department stores that sell much of its merchandise. The apparel company isn't a household name, though it owns many well-known brands. In 2010, it agreed to buy Tommy Hilfiger for about $3 billion, making it the biggest menswear supplier to retailer Macy's Inc

PVH and Warnaco had talked on and off about a merger for eight years, but circumstances were never quite right. The discussions started in 2003, before either Mr. Chirico or Warnaco's CEO, Helen McCluskey, were in their posts, Mr. Chirico said.

PVH had just acquired the Calvin Klein license that covered women's sportswear and men's shirts, and was interested in bringing Calvin Klein underwear and jeans into its fold, he said.

PVH and Warnaco had tried to buy one another or merge at least six times over the past few years, depending on which company's stock was higher at the time, said Ken Berliner, president of Peter J. Solomon Co., PVH's lead adviser on the deal. A previous round of talks ended in 2010 after the Tommy Hilfiger acquisition made PVH a much larger company than Warnaco, a person familiar with the deal said.

The deal comes at an odd time for Warnaco and Ms. McCluskey, who just took the CEO job in December. The executive presented her own strategic plan for the company earlier this year.

In addition, acquiring Warnaco will help PVH's brands expand internationally. The bulk of PVH's business is in the U.S., and the company has a sizable presence in Europe. Warnaco, meanwhile, has factories, retail operations and management in Asia and Latin America, two fast-growing markets where many apparel makers hope to expand.