Germany's two main department store chains are set to merge in a deal under which Canada-based Hudson's Bay Co. will form a joint venture with Austria's Signa.
The deal announced Tuesday will bring together Karstadt, owned by Signa, and Kaufhof, owned by HBC. It also includes HBC Europe's other retail holdings, among them Belgium's Galeria Inno and the Netherlands' Hudson Bay.
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Billed as a "merger of equals," the agreement will give Signa 50.01 percent of shares in the resulting holding company and HBC 49.99 percent. The company is to be led by Karstadt CEO Stephan Fanderl.
Department stores have been struggling for years to compete with online retailers and shopping malls.
The owners say the combined company will have 243 downtown locations and 32,000 staff. The deal requires regulatory approval.