Men’s Wearhouse to Buy Jos. A. Bank for $1.8 Billion

Men’s Wearhouse Inc. (MW) agreed to buy smaller rival Jos. A. Bank Clothiers Inc. (JOSB) for about $1.8 billion in cash, ending a five-month takeover battle between the two menswear retailers.

Both companies’ boards have approved the transaction, the retailers said today in a statement. Jos. A. Bank also will terminate a separate deal to buy the Eddie Bauer brand and cancel a plan to buy as much as $300 million of its own stock.

Today’s agreement settles a feud Jos. A. Bank began in October with an offer for its larger rival. Men’s Wearhouse turned down that proposal and countered with multiple bids for Jos. A. Bank, all of which were rejected as too low. Jos. A. Bank said it would begin talks with Men’s Wearhouse last month following a sweetened $1.78 billion offer.

“It’s a strong acquisition that is mutually beneficial to both companies and shareholders of both companies,” Mark Montagna, a Nashville, Tennessee-based analyst for Avondale Partners, said in a phone interview.

The combined company will have more than 1,700 U.S. stores and sales of about $3.5 billion on a pro forma basis, the retailers said. Jos. A. Bank can benefit from Men’s Wearhouse’s tuxedo-rental business, while Men’s Wearhouse can learn from Jos. A. Bank’s ability to inexpensively source products, Montagna said.

Jos. A. Bank, based in Hampstead, Maryland, rose 3.9 percent to $64.24 at 12:44 p.m. in New York. Houston-based Men’s Wearhouse climbed 5.9 percent to $57.80.