Samsonite International S.A. said on Friday it would buy Tumi Holdings Inc for $26.75 per share in an all-cash transaction valuing Tumi at $1.8 billion, as the world's biggest luggage group expands in the luxury market.

Hong Kong-listed Samsonite said it would finance the deal with bank loans and that the transaction was expected to close in the second half of the year subject to regulatory and shareholder approvals.

Tumi

Investors applauded the deal, sending Samsonite shares up to as much as HK$25.2, their highest since October. The stock trimmed gains but was up 2.3 percent by midday, outpacing a 0.6 percent gain in the benchmark Hang Seng Index .HSI.

"It is a perfect match in many aspects such as retail channels and regional mix, category mix and even price points," said Boyoung Kim, an analyst at BNP Paribas.

"It can bring huge synergies in the long term," she added.

The deal price represents a 38 percent premium to New Jersey-based Tumi's volume weighted average price of $19.34 for the five days up to and including March 2, the statement said.

Tumi's net sales increased 4 percent year-on-year in 2015 to $548 million, of which North America accounted for 68 percent. Its net income rose 8.6 percent last year to $63 million.

Samsonite Chief Executive Officer Ramesh Tainwala said the company planned to expand Tumi's presence in Asia and Europe, while strengthening its business in North America.

Morgan Stanley Asia Ltd acted as financial advisor to Samsonite, and Goldman Sachs & Co. acted as financial advisor to Tumi.

Apart from its flagship brand, Samsonite sells Lipault travel bags, high-end Hartmann suitcases, American Tourister luggage, and High Sierra and Gregory backpacks.

The company has been on an acquisition spree, buying last February Rolling Luggage, which operates stores in airports, and Italian travel luggage retailer Chic Accent in October.

Samsonite is also keen to expand its reach to offset slowing growth in China, which accounts for about 10 percent its global sales. The company has previously said it expected its China sales growth to halve from the second half of the year.