House of Fraser has confirmed it has been acquired by Chinese conglomerate Sanpower Group in a deal valuing it at £480m.

Sanpower Group, which operates the Nanjing Xinjiekou Chinese department store chain, “signed a definitive agreement” to acquire 89% of House of Fraser, which said it will now use the investment to expand overseas and boost its multichannel offer.

The deal, which is expected to close in about four months, represents the largest overseas acquisition in the retail sector by a Chinese business. It is thought Sanpower Group is plotting the opening of up to 50 Chinese House of Fraser stores that could open under the name Oriental Fraser.

House of Fraser executive chairman Don McCarthy will step down upon completion of the transaction. He said the deal “opens an extremely exciting chapter in the story of House of Fraser”.

He said: “The acquisition by Nanjing Cenbest will allow House of Fraser’s Management team to continue to grow and invest in the business in the UK and Ireland, provide a strong platform from which to expand the brand in international markets and to further develop our multichannel, stores and premium fashion offering.

“Since we took the company private in 2006, John King and his team have done a fantastic job of growing the business in what can only be described as a difficult retail and economic environment.”

The confirmation of the deal ends House of Fraser’s plans to float on the London Stock Exchange.

Sanpower Group Chairman Yuan Yafei said: “This acquisition is a landmark transaction for a Chinese listed company. House of Fraser is a strong and iconic heritage brand in the UK and abroad, with exceptional fashion credentials.

“We have always been looking to invest in strong brands like House of Fraser, and take them to the next level of growth. With House of Fraser, we see significant opportunities to develop the business further and replicate the already successful model in international markets, in particular in China.

“We are very much looking forward to working closely with John King and his Management team to enhance the business and unlock House of Fraser’s potential to become a leading global brand. To date, this is the largest cross-border direct acquisition by a Chinese non-state-owned A-share listed company, and the largest overseas acquisition in the retail sector by a Chinese business.”

House of Fraser formally recognised Mike Ashely’s acquisition of 11% of the business last week after he bought out entrepreneur Sir Tom Hunter.

House of Fraser chief executive John King Said: “House of Fraser has delivered strong growth driven by the continued success of our key strategic pillars including investment in our stores, our online channel, growing our House Brands and the introduction of exciting premium brands. The Management team and I are looking forward to working closely with Nanjing Cenbest to take House of Fraser to the next phase of growth.”

Nanjing Cenbest is being advised by Bank of America Merrill Lynch and House of Fraser by Reorient Group.