Myer has signed an agreement to acquire Premier Investments’ Apparel Brands business in Australia and New Zealand, in exchange for shares.

Myer will acquire the brands Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui E for 890.5 million new, fully paid ordinary shares. Myer will also receive $82 million of cash from Premier.

The deal is expected to deliver combination benefits of at least $30 million earnings per year on a run-rate basis over the short to medium term.

The transaction, targeted to be completed in early next year, will result in Premier owning 51.5 per cent of Myer’s issued capital.

Premier will then undertake an in specie distribution of all its Myer shares to eligible Premier shareholders on a pro rata basis, resulting in Premier shareholders becoming shareholders in Myer directly.

Consequently, Premier’s largest shareholder, Century Plaza Investments and its associates, will become Myer’s largest shareholder with a pro forma shareholding of 26.8 per cent.

It is intended that Premier chairman Solomon Lew will be invited to join Myer’s board as a non-executive director, representing Century Plaza Group.

Meanwhile, Olivia Wirth will continue to lead Myer as executive chair.

“The combination of Myer and Apparel Brands is transformational for our business,” said Wirth.

“If approved by shareholders, it will create a leading retail group with more than 780 stores across Australia and New Zealand, with a large and highly engaged customer base and capital to fund future investment and growth.”

Premier will maintain ownership of Smiggle and Peter Alexander brands, which it intends to focus on and invest in.