Calvin Klein buys Hilfiger

Phillips-Van Heusen the clothing
conglomerate that owns Calvin Klein, is busying Tommy Hilfiger, once a
leading purveyor of colourful preppy clothing, for about $3 billion, in cash and

With the acquisition, Phillips-Van
Heusen, which also owns Arrow and Izod and licenses brands like Geoffrey Beene and Kenneth Cole New York,
will seek to take advantage of Tommy Hilfiger’s strong European distribution
channels for its own products. Despite Tommy Hilfiger’s reputation as a quintessentially
American clothier, two-thirds of the company’s business is based in Europe.

The deal includes the assumption of
$138 million in liabilities, Phillips-Van Heusen said.

The chief executive of Phillips-Van
Heusen, Emanuel Chirico, said in a statement that the acquisition
was “a unique opportunity to bring together two premier companies, each with
iconic brands.”

“Tommy Hilfiger fits all of our
acquisition criteria: a strong brand, superior management, highly profitable,
immediately accretive to earnings, and focused on international growth,” Mr.
Chirico said.

While Mr. Hilfiger no longer holds
a management role at the company that bears his name, he remains a principal designer
and a public face for the clothier.

The deal is only the
latest to emerge from an active market for mergers and acquisitions, as corporate
buyers feel more confident pursuing long-desired targets. The sale of Tommy
Hilfiger would be a lucrative exit for its current owner, the British private equity firm Apax
Partners. Apax has twice sought an initial public offering for the clothier,
and Tommy Hilfiger’s chief executive, Fred Gehring, said an I.P.O. was the most
likely next step for the company.