Calvin Klein fashion and its famous underwear is to be reunited under one roof after US fashion group Phillips-Van Heusen (PVH) said it had agreed to buy rival Warnaco for $2.9bn (£1.8bn).
The deal comes 15 years after the CK underwear and jeans businesses were licensed to Warnaco and will bring the entire brand under the control of Tom Murry, who has been in charge of Calvin Klein at PVH.
Coming two years after PVH bought fashion brand Tommy Hilfiger for $3bn, the deal, at a 34% premium to Warnaco's last closing share price, will also give the US firm control of Warnaco-owned brands, including Speedo swimwear.
Warnaco shares rose 40% on the New York stock exchange after the news. PVH shares gained 23%.
PVH chief executive Emanuel Chirico said: "Having direct global control of the two largest apparel categories for Calvin Klein – jeans and underwear – will allow us to unlock additional growth potential of this powerful designer brand."
PVH, also owner of Van Heusen shirts, expects the sale to be finalised next year and give it annual revenues of more than $8bn. PVH and Warnaco were considered as potential bidders for jeans maker True Religion, which is up for sale.
A modern competitor to the likes of Ralph Lauren and Michael Kors, PVH's roots go back to 1881, when it was a shirt mender for miners in Pottsville, Pennsylvania.
PVH bought the Calvin Klein brand in 2003. Established by the designer of the same name in the late 1960s, it went on to transform the men's underwear market in the 80s and propelled its advertising models to fame. Actor Mark Wahlberg famously wore the boxer shorts on billboards in the 90s and Brooke Shields wore the jeans in 1979. Recent models include Diane Kruger, Eva Mendes and Alexander Skarsgård.
