UPDATE 4-PVH to buy Warnaco for Calvin Klein control

* Offer of $68.43 a share represents a 34 percent premium

* Expects deal to add $1 a share to earnings in third year

* PVH says it has committed financing of $4.33 billion

* PVH shares up as much as 23 percent

* Warnaco shares up as much as 40 percent

Oct 31 (Reuters) - PVH Corp will buy rival Warnaco Group Inc for about $2.8 billion in a deal that will give the company more control of the Calvin Klein clothing brand and boost profits immediately, sending PVH shares up as much as 23 percent.

PVH bought Calvin Klein in 2003 and makes formal and sportswear under that brand, while Warnaco has held the licensing agreements for Calvin Klein jeans and underwear since 1997.

``Having direct global control of the two largest apparel categories for Calvin Klein - jeans and underwear - will allow us to unlock additional growth potential of this powerful designer brand,'' PVH Chief Executive Officer Emanuel Chirico said in a statement on Wednesday.

The parties expect the deal to close in early 2013, after which former Warnaco stockholders will own about 10 percent of PVH stock.

PVH shares were trading up 20 percent at $109.81 Wednesday morning on the New York Stock Exchange.

``What investors are excited about is that the deal is accretive for PVH right away, and that management did not over pay to bring the CK licenses into the house,'' Morningstar analyst Peter Wahlstrom told Reuters.

Wahlstrom also said noted that PVH would have access to Warnaco ``heritage'' brands like Speedo, Chap, Warner's and Olga, which are complementary to PVH's current portfolio.

``The heritage segment ... will be slow growing, but solid cash flow generators for PVH,'' he said.

The combined business will have $8 billion in annual revenue. PVH said it expected the acquisition to add 35 cents a share to earnings, excluding special items, in the first year and $1 in the third year, when it forecasts annual savings of about $100 million.

The company said it now expected full-year earnings per share to come in at the high end of its Oct. 2 outlook of $6.32 to $6.37 per share excluding special items.

Based on PVH's closing price of $91.50 on Friday, the last day the stock traded, the deal values Warnaco at $68.43 a share for a premium of 34 percent. Trading was closed on Monday and Tuesday due to the Hurricane Sandy.

On Wednesday, Warnaco shares were up 39 percent to $70.71 on the New York Stock Exchange.

``You are getting a strategic partner, and you are getting a brand hold, and you are acquiring some heritage brands, so it's a win win win,'' said Marshal Cohen, NPD's chief industry analyst.

Cohen also said the deal allows PVH a better chance to balance out domestic and international sales, taking advantage of Warnaco's market in Asia and Latin America.

On a call with analysts, Chirico said the company would use the deal to directly develop its Tommy Hilfiger brand in established Warnaco markets.

Companies often have to depend on third-party manufacturers, marketers and licensing agents to sell their brands in international markets, making it a costly and time taking process. Direct control allows them more flexibility and saves them money.

The Warnaco deal comes about two years after PVH bought the Tommy Hilfiger brand for about $3 billion to get a bigger foothold in markets like Europe and Asia.

New York-based Warnaco operated 1,759 Calvin Klein retail stores worldwide as of Dec. 31.

PVH is paying $51.75 in cash and 0.1822 of a share of common stock for each Warnaco share.

The deal value is based on Warnaco's 40.87 million shares outstanding as of Aug. 1.

Warnaco's Calvin Klein businesses will be run by Tom Murry, chief executive officer of Calvin Klein.

PVH, which competes with Ralph Lauren Corp, Perry Ellis International Inc and Michael Kors Holdings Ltd , said it had commitments for $4.33 billion in financing from Barclays, BofA Merrill Lynch and Citigroup Global Markets Inc.