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Phillips-Van Heusen to acquire Tommy Hilfiger for USD3.0bn

Phillips-Van Heusen has signed a definitive agreement to acquire Tommy Hilfiger, which is controlled by funds affiliated with Apax Partners, for total consideration of EUR2.2bn (approximately USD3.0bn) plus the assumption of EUR100m in liabilities.

The consideration includes EUR1.924bn in cash and EUR276m in PVH common stock.

The combination will create one of the world’s largest apparel companies with combined revenue of approximately USD4.6bn.

PVH expects the transaction to be immediately accretive to earnings per share before one-time costs and accounting charges. PVH expects earnings accretion of USD0.20 to USD0.25 per share on a non-GAAP basis in the 2010 fiscal year ending 30 January 2011 and earnings accretion of USD0.75 to USD1.00 per share in the 2011 fiscal year ending 29 January 2012.

PVH expects to realise approximately USD40m of annualised cost synergies in the transaction.

The closing of the transaction is subject to receipt of financing and other customary conditions, including receipt of required regulatory approvals, which PVH does not anticipate difficulty in obtaining. The transaction does not require a PVH stockholder vote and is expected to close during PVH’s fiscal 2010 second quarter.

"This is a unique opportunity to bring together two premier companies, each with iconic brands, which will deliver enhanced opportunities for our stockholders, business partners, customers and employees as we leverage a combined global platform in the years ahead," says Emanuel Chirico, chairman and chief executive officer of PVH.

"We are very pleased to be joining forces with PVH, one of the premier apparel companies in the world. The scale of the combined company in the US will deliver obvious benefits for both companies, while Tommy Hilfiger’s significant international presence and infrastructure offers an opportunity for PVH to introduce a number of its brands into the international market," says Fred Gehring, chief executive officer of Tommy Hilfiger.

Upon the closing of the transaction, Tommy Hilfiger will remain in his role as principal designer and visionary for the Tommy Hilfiger brand. Gehring will continue as chief executive of Tommy Hilfiger, will assume the added responsibility as chief executive of PVH’s international operations, and will join the PVH board of directors.

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