Big changes are sweeping the fashion business, and this time the stimulant is a huge buyout rather than the popular fashion weeks. PVH Corp (NYSE:PVH) has inked the agreement to buy Warnaco Group Inc (NYSE:WRC), owner of Calvin Klein brand jeans, in a $2.9 billion deal. The specifics of the deal entail a payment of $51.75 million and  0.1822 of a PVH Corp (NYSE:PVH) share for every  share. PVH has bought each Warnaco Group Inc (NYSE:WRC) share for $68.43, which makes the offering price 34 percent higher than the previous day’s closing price of $50.88.

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The buyout confirms PVH’s plan to make itself the largest apparel business of the world. Emanuel Chirico, CEO of PVH Corp (NYSE:PVH), said last year that he planned to look aggressively for acquisitions that will make his company the largest clothing business in the world. The latest agreement has joined all Calvin Klein branded products under a single name and has transformed PVH into a company with $8 billion in revenue.

“This is a unique opportunity to reunite the House of Calvin Klein and reinforces our strategy to drive the global growth of Calvin Klein,” Chirico said in the statement. “We plan to align Warnaco’s established operations in Asia and Latin America with our strong operations in North America and Europe to fuel our growth strategies for both Calvin Klein and Tommy Hilfiger.”

PVH’s other acquisitions include, G.H. Bass & Co, Izod, and the Tommy Hilfiger brand. It has a license to sell brand names like, Geoffrey Beene and Kenneth Cole New York, Van Heusen and Izod. Prior to the deal, PVH Corp (NYSE:PVH) had taken over Calvin Klein, back in 2003 from the renowned designer. Warnaco was the licensed distributor of CK jeans, as assigned by PVH  before this buyout.

If the buyout closes, as expected, by the beginning of 2013, it is all set to add EPS of $0.35 to each of PVH’s shares. Warnaco’s shareholders will have a 10 percent stake in PVH Corp (NYSE:PVH) and the CEO of Warnaco Group Inc (NYSE:WRC) will most likely join the board of directors at PVH.

Competitors of PVH Corp (NYSE:PVH) include, Ralph Lauren and V.F. Corporation (NYSE:VFC) Shares of PVH were up by 18.4%, while Warnaco Group Inc (NYSE:WRC) surged more than the 38.3 percent in the New York Stock Exchange.