Hudson’s Bay Company, owner of Saks Fifth Avenue, is to buy German department store business Galeria Kaufhof from Metro Group.

Hudson’s Bay chief executive Jerry Storch said the deal, valued at €2.83bn (£2.05bn) including some Kaufhof liabilities, is “a significant step forward in our plans to become a premier global retailer”.

The possibility of bringing the Saks Fifth Avenue and Saks Off 5th fascias to Germany and Belgium, where Kaufhof also has a presence, is already being considered by Hudson’s Bay chiefs.

Following the deal, which is expected to be completed by the end of this third quarter of this year, Germany is expected to account for 31% of Canada-based Hudson’s Bay’s sales versus 44% in its main market, the US.

Hudson’s Bay is taking control of 103 Galeria Kaufhof stores in Germany, 16 Sportarena shops and 16 Galeria Inno department stores in Belgium.

Hudson’s Bay has committed to maintain Galeria Kaufhof’s store count and staff numbers and to keep it headquarted in Cologne. Existing management will also stay on.

Hudson’s Bay executive chairman Richard Baker said: “This is an exciting transaction that demonstrates our proven growth formula in action, and it is the right investment and the right time.

“We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Galeria Kaufhof build on its exceptional real estate to become the number one department store in Germany.”

Storch said: “This transaction is a significant step forward in our plans to become a premier global retailer. This is a strong foundation to explore additional opportunities for growth throughout the Continent.”

Metro said the sale will allow it to focus on its other businesses such as wholesaler Cash & Carry, electricals retailer Media-Saturn and hypermarket division Real.