UK-based Sainsbury's has agreed to acquire Home Retail Group for £1.4bn after five months of talks.
The terms and conditions of the deal will be the same as those offered by Sainsbury's two weeks ago,when Steinhoff of South Africa stepped out of the acquisition race.
Home Retail had then stated that it would recommend Sainsbury's offer to its shareholders.
As per the terms, Sainsbury's will be pay 55p in cash and 0.321 of its own shares for each share of Home Retail, which would value the Argos owner at £1.2bn.
Shareholders of Home Retail will also receive 25p a share from the £200m sale of its Homebase chain, as well as 2.8p a share in lieu of a final dividend for the fiscal year, ending in March.
All these payments together take the value of the acquisition to £1.4bn.
Sainsbury's chairman David Tyler as quoted by The Guardian as saying: "We are very pleased the board of Home Retail has recommended our offer for the acquisition of its business to its shareholders.
"The combined business will offer a multi-product, multichannel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders."
Home Retail chairman John Coombe was quoted by the publication as saying: "Argos is both an icon of the British high street and also a leader in the digital transformation of UK retailing.
"We are pleased that Sainsbury's has recognised our progress and our potential with its recommended acquisition of Home Retail Group."
Sainsbury's intends to open Argos stores in its larger outlets to offer more products to customers.