J.C. Penney (NYSE:JCP) said today it will acquire a 16.6% stake in Martha Stewart Living Omnimedia (NYSE:MSO) for about $38.5 million, or $3.50 per share.
With the stake, J.C. Penney will form a 10-year partnership with Martha Stewart Living, creating stores-within-stores dedicated to Martha Stewart products staffed by specially trained employees.
The companies will also jointly develop an e-commerce site. The retail and online changes will be launched in 2013.
Martha Stewart Living will receive more than $200 million from the partnership.
In a report on the partnership, The New York Times said Martha Stewart will continue its relationships with other retailers like Macy's (NYSE:M) and Home Depot (NYSE:HD).
Martha Stewart Living had hired the Blackstone Group (NYSE:BX) in May to explore the company's strategic options.
The New York Times noted that the partnership has been masterminded by new CEO Ron Johnson, the architect of Apple's (NASDAQ:AAPL) retail stores, who J.C. Penney brought in to revamp the company.
Martha Stewart Living Omnimedia shares are seeing strong gains Wednesday, while J.C. Penney shares are seeing a more modest gain.
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