NEW YORK — Men’s Wearhouse and Jos. A. Bank, after an extended courting that included overtures on both sides and flirtations with other parties, will combine to create the nation’s fourth-largest menswear retail chain.
Men’s Wearhouse Inc. said Tuesday that it’s buying Jos. A. Bank Clothiers Inc. for $1.8 billion. The company will pay $65 a share, a 5 percent premium to Jos. A. Bank’s Monday closing price of $61.83.
Bank said it’s terminating its deal to acquire the parent company of Eddie Bauer, which sells outerwear.
On Tuesday, shares of both companies rose. Men’s Wearhouse’s stock was up 4.7 percent to $57.14; Jos. A. Bank rose 3.9 percent to $64.22.
The deal follows months of fighting over who would acquire whom. Industry watchers had speculated a merger was inevitable, given the challenges the companies face in the increasingly competitive menswear landscape. With about 1,700 US stores and $3.5 billion in annual sales, the combined company’s reach in men’s clothing will be behind only Macy’s, Kohl’s, and J.C. Penney.
‘‘Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth,’’ said Doug Ewert, chief executive of Men’s Wearhouse.
Bank made the first move, in October, when it offered to buy its larger rival for $2.3 billion. Men’s Wearhouse turned the tables, offering to buy its rival for $1.54 billion. But after Bank turned down that bid, Men’s Wearhouse increased its offer to $1.6 billion and then again to $1.78 billion.
In the middle of the back-and forth, Jos. A. Bank said last month it was buying Everest Holdings LLC, Eddie Bauer’s owner. But it left the door open for a deal with Men’s Wearhouse by saying if it received a superior acquisition offer, it would pay a termination fee to end the Eddie Bauer deal.
Despite the rough negotiations, both companies say they expect a smooth integration. In a joint news release, they said shareholders will benefit from $100 million to $150 million in savings over three years as the new company improves sourcing and merchandising.
Men’s Wearhouse declined to comment on any layoffs or management changes beyond what was in the press release: ‘‘Management will consist of the most qualified individuals from both organizations.’’
The suit business generated $2.3 billion in revenue last year; it’s been up 4 percent over the past three years, according to NPD Group, fueled in part by tight-fitting suits that have attracted young males.
Stifel Nicolaus analyst Richard Jaffe said the deal means both companies can lower costs and borrow each other’s expertise.