Galeria Kaufhof

The move comes as the department store chains seek to respond to fierce competition from e-commerce players.

Signa's founder and chairman said the company believes it can complete the necessary due diligence to put together a deal for Germany's largest retail chain in two weeks, should Hudson's Bay decide to engage in negotiations.

German malls and stores are being snapped up by international buyers at the fastest pace since 2007 even as online shopping lures customers away from the country’s bricks-and-mortar shops.

Hudson’s Bay Co.’s acquisition of a 136-year-old German retailer lifts the value of its real estate by 20 percent to C$11 billion ($8.9 billion) and brings it a step closer to unlocking that value in a new initial public offering.

Hudson’s Bay Co., the oldest company in Canada, has won the bidding for Metro AG’s Galeria Kaufhof department-store chain in Germany, according to people familiar with the matter.