Canada's oldest company, Hudson's Bay, has won the bidding war for German department store chain Galeria Kaufhof, parent company Metro AG said Monday.

The announcement comes just hours after a late-Sunday meeting of Metro's supervisory board, which unanimously approved the sale. The deal will set back the Toronto-based buyer 2.8 billion euros ($3.15 billion).

The takeover marks the end of an era for the iconic Kaufhof, which was founded in 1879. When Hudson's Bay is handed the keys in September, it will be the first time in history that the future fate of the German company will be decided by foreign owners.

Overhaul without the hurt?

Rumors of the transaction had fueled criticism that the Canadian buyer did not understand the German market. Hudson's Bay responded by pledging that it would leave intact Kaufhof's management, and that there would be no cuts to the company's workforce of over 21,000 employees.

Galeria operates 135 stores in Germany and neighboring Belgium.

This may have ultimately swung the pendulum in favor of Hudson's Bay. Austria's Signa Retail, which took over Kaufhof-rival Karstadt last year, had reportedly matched Hudson's offer. But, insiders told Bloomberg Business, this had raised fears that an eventual Karstadt-Kaufhof could lead to layoffs down the line.

Hudson's Bay will now face the challenge of bringing one of Germany's oldest department store brands into the 21st century, at a time when traditional chains like Galeria Kaufhof and Karstadt have been struggling to adapt to the digital age, dominated by e-commerce behemoths such as Amazon.

The sale gives Metro a much-needed liquidity injection, after company shares have dropped by some 46 percent to 31 euros since December 2010.

Galeria Kaufhof reported sales of 674 million euros in the first half of 2015, with earnings before interest and taxes coming in at 126 million euros. Both figures represented slight year-on-year drops.

pad/hg (dpa, Reuters)