NEW YORK — Looks like the best suitor won.
After an extended chase that included overtures on both sides and flirtations with other parties, Men's Wearhouse and Jos. A. Bank will combine to create the nation's fourth-largest men's wear retail chain.
Men's Wearhouse Inc. said Tuesday that it's buying rival Jos. A. Bank Clothiers Inc. for $1.8 billion. Men's Wearhouse will pay $65 a share, a 5 percent premium over Jos. A. Bank's Monday closing price of $61.83. Jos. A. Bank also said it's terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear.
The acquisition comes after months of the two chains publicly fighting over who would acquire whom. The combined company's reach in men's clothing will fall behind only Macy's, Kohl's and J.C. Penney.
"Together, Men's Wearhouse and Jos. A. Bank will have increased scale and breadth," said Doug Ewert, president and CEO of Men's Wearhouse.
Jos. A. Bank made the first move in October, offering to buy its larger rival for $2.3 billion. Men's Wearhouse shot down that offer and turned the tables, offering to buy its rival for $1.54 billion. But after Jos. A. Bank turned down that bid, Men's Wearhouse increased its offer to $1.6 billion, and then again to $1.78 billion.
In the middle of the back-and forth, Jos. A. Bank said last month that it was buying Everest Holdings LLC, the parent company of Eddie Bauer. But the company left the door open for a deal with Men's Wearhouse by saying if it received a superior acquisition offer, it would pay a termination fee to end the Eddie Bauer deal.
Despite the rough courting period, both companies say they expect a smooth integration. In a joint press release, they said shareholders of both companies will benefit from about $100 million to $150 million in savings realized over three years as the company streamlines its duplicative corporate function and improves sourcing and merchandising.
"Our board has been rigorously focused on pursuing a path for our shareholders that maximizes value created," said Robert N. Wildrick, chairman of Jos. A. Bank's board.
Analysts say there's a bright future for the combined company. The suit business, which generated $2.3 billion in revenue last year, has been relatively healthy. It's been up 4 percent over the past three years, according to market research firm NPD Group, fueled in part by tight-fitting suits that have attracted young males.