The US retailer H&ampm is buying rival Forever 21 for $3bn, with the deal’s value set to hit $7bn in 2018, according to a person familiar with the matter.
The deal is the latest in a string of mergers and acquisitions by American companies that have seen big-name brands take on smaller, more niche brands.
Forever 21 and H&amore are the largest US retailers and were among the first major retailers to announce plans to sell off assets.
The $3 billion deal for Forever 21 was approved on Friday by the board of directors at H&ammos board of governors, which also includes chief executive John Sperling.
The buyer is a unit of US private equity firm Kleiner Perkins Caufield &ampamp.
By buying Forever 21, the company is betting that the retailer’s online presence will boost its sales.
H&ams CEO Jeff Bezos, who recently announced plans to invest $1bn in H&AMore, said in November that the company would take a larger, more diverse business.
Forever21, which is based in New York, has struggled to stay relevant with its core business of women’s apparel.
Forever has struggled since it acquired H&M in 2007 for $130m and has struggled with slowing growth and a falling share price.
Forever is also facing a wave of consolidation among American retailers, which have been increasingly focused on smaller retailers, especially as more women and ethnic minorities shop online.
Forever’s new chief executive is Robert Miller, who was a partner at Kleiner Capital and the firm’s president before joining H&amlore.
He previously headed up the US apparel giant Calvin Klein.
Hampers stock fell 3.2 per cent on Friday after the news was announced.
Forester is the second US retailer to make a purchase in recent months.
In February, the retailer closed its online store, and the company will focus on expanding its physical stores.
H&ms shares rose nearly 2 per cent in after-hours trading to $1.15.