Mothercare is paying ELC's owner, Chelsea Store Holdings, £49m in shares and taking on the company's £36m debts. The combined group will have 435 UK stores and 420 franchised outlets around the world.
Mothercare said it would now "explore the opportunity to open additional international stores and extend the global reach of both brands".
It will also be looking to make savings from the combined group's UK store portfolio - Mothercare currently has 225 UK outlets to ELC's 210 - but gave no details of any potential branch closures.
Chelsea Store Holdings is owned by a consortium of Waterstone's founder Tim Waterstone, US private equity firm Rhone Capital and publisher DC Thomson.
Mothercare has recently turned around its fortunes after a three-year recovery plan that followed losses of £24.8m in 2003.