Leon’s Furniture has agreed to acquire The Brick in a deal valued at approximately $700 million, according to a statement released Sunday afternoon.

The two mega-chains will continue to operate as separate entities in a move that will see them retain their head offices in Toronto and Edmonton.

Leon’s will acquire all of the outstanding common share purchase warrants of The Brick for $4.40 per warrant, and pay $5.40 per share in cash or debentures.

Last Friday’s closing price of The Brick shares was $3.50.

The transaction between the two companies is expected to be finalized in the first quarter of 2013, subject to certain conditions, including court approval and relevant regulatory approvals.
President and CEO of Leon’s, Terry Leon, said the agreement will strengthen the company’s position in the home furnishings market.

“Our combined team will have access to national buying opportunities in merchandising and marketing and a national distribution network that will enable us to greatly enhance our online shopping capabilities, “he said. “We are very excited to build on the relationships we have established over the years.”

Vi Konkle, President and CEO of The Brick, said the move will be a boost to both companies. 
“We welcome this opportunity to partner with this iconic corporation,” he said. “ By joining forces, we can strengthen both of our businesses.”

The CEOs and board chairs from both companies will host a joint press conference Monday at 10 a.m. at Leon’s Furniture on Bremner Boulevard in Toronto.

Leon’s, which was founded in 1909, has 76 stores in Newfoundland and Labrador, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, Nova Scotia, New Brunswick and Prince Edward Island. The Brick has 230 stores under four banners, including United Furniture Warehouse, and first opened in 1971 In Edmonton.