The parent company of Saks Fifth Avenue has reportedly agreed to acquire its rival Neiman Marcus for $2.65 billion. The deal, which is expected to be announced imminently, will see the involvement of Amazon.com Inc. (NASDAQ:AMZN).

What Happened: The acquisition, which has been approved by the boards of both companies, will result in the creation of a luxury retail powerhouse, reported The Wall Street Journal, citing people familiar with the matter.

The deal is being financed by HBC, the holding company that purchased Saks in 2013. Amazon will take a minority stake in the new entity, to be named Saks Global, and provide it with technological and logistical support. Another minority shareholder is Salesforce Inc (NYSE:CRM).

The combined company is expected to have annual sales of around $10 billion. Saks already has a business relationship with both Amazon and Salesforce, which the deal will further strengthen.

Luxury behemoth LVMH Moët Hennessy Louis Vuitton, owner of Louis Vuitton and numerous other brands, achieved sales of approximately $94 billion last year.

Saks Fifth Avenue, Neiman Marcus, and Amazon did not immediately respond to Benzinga's request for comment.

Why It Matters: The acquisition is a significant development in the luxury retail sector, which has been facing challenges due to changing consumer behavior and the rise of direct-to-consumer sales by fashion brands.

Both Saks and Neiman Marcus have been struggling in recent years, with Neiman Marcus even filing for bankruptcy in 2020. The deal is seen as a strategic move to strengthen the companies' positions in the face of these challenges.

This acquisition comes after Neiman Marcus rejected a $3 billion takeover bid from Saks in 2023. The two companies have been in negotiations for a potential merger for years, and this deal is a culmination of those efforts.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote