South African retailer Steinhoff International Holdings will buy Mattress Firm Holding Corp, the largest specialty bedding retailer in the United States, for $3.8 billion which includes debt, both companies said on Sunday.
Steinhoff said it will pay $64 per share, a premium of about 115 percent to Mattress Firm's Friday close in a deal that will create the world's largest mattress retail distribution company. The boards of both firms have approved the deal, the companies said in a statement.
The deal is subject to completion of a successful tender offer for Mattress Firm's shares. The transaction is expected to close in the third quarter of 2016, the companies said.
Mattress Firm, founded in 1986, has approximately 3,500 stores across 48 states with 80 distribution centers.
Steinhoff is a German-listed $22 billion furniture conglomerate led by South African retail mogul Christo Wiese who is also Steinhoff's chairman and largest shareholder.
Steinhoff, which owns brands in Africa, Australia, the U.K. and across Europe, last month agreed to pay nearly $800 million for British-based discount chain Poundland after two previous attempts to expand in Europe fell through this year.
The Mattress Firm Holding deal would give Steinhoff access to the growing U.S. market, and help diversify its operations and guard against possible repercussions following Britain's June vote to leave the European Union.